Fidelity came out with its average and median 401(k) balances by generation. They are as follows:
Gen Z: Average $7,100, Median $2,500
Millennials: Average $44,900, Median $15,500
Gen X: Average $145,500, Median $44,000
Boomers: Average $215,000, Median $61,200
For 2025, you can add on 20% to the figures thanks to a 26% increase in the S&P 500 in 2023 and a 23% increase in 2024. How does your 401(k) balance compare to the average and median balances for your generation?
Low Median 401(k) Balances Across Generations
What stands out most from the data is how low the 401(k) balances are for every generation. I hope your 401(k) balance is way higher than the figures above! There is no way you can retire comfortably on such low 401(k) balances. You need to save way more.
Please realize this data is only for Fidelity accounts and many workers have multiple 401(k) accounts or rollover IRAs due to job hopping. That said, Fidelity is one of the largest 401(k) providers in America.
If you are a Boomer, there's no way you can retire off a median 401(k) balance of only $61,200. Good thing Boomers have the largest percentage of people with valuable pensions. In addition, Boomers are still able to take full advantage of Social Security benefits. Boomers may also have more 401(k) accounts.
I'm most concerned about Millennials with only $15,500 and Gen Xers with only $44,000 in their 401(k)s. Only a small minority of people in these generations have lifetime pensions. In addition, at the current rate, only about 70% of Social Security benefits will be paid out when these two generations reach their full retirement age of 67.
Gen Z, at least, still has decades of work and savings to go.
We Should All End Up 401(k) Millionaires
Perhaps I'm more disappointed about the 401(k) balances by generation compared to the average person because I strongly believe the majority of Financial Samurai readers will become 401(k) millionaires.
Maxing out a 401(k) as soon as possible is a fundamental personal finance move. Once your income is above $80,000, there is little excuse not to max out your 401(k).
Although cash flow may feel tight initially, you'll learn to live within your means within a few months after contributing the maximum. Then it's just autopilot from there.
If you're curious about when you'll become a 401(k) millionaire, I put together this chart using $18,500 a year in average 401(k) contributions. In 2025, an employee can contribute a maximum of $23,500. The total 401(k) contribution is $70,000, which includes $46,500 for an employer match if you are so lucky.
Using a reasonable 7% annual compound rate of return and annual contributions of $18,500, your 401(k) will grow to $1 million in about 22.5 years. If you start contributing $18,500 a year at age 26, you'll be a 401(k) millionaire at age 48.
Temporarily No Longer A 401(k) Millionaire
What's sad is that I used to be a 401(k) millionaire at the beginning of 2022. My 401(k) balance rose to about $1.1 million at its peak. Then it declined to about $995,000 in August 2023 after being down to as low as ~$850,000 in October 2022.
Despite no longer being a 401(k) millionaire at 46 years old, I'm hopeful the balance will surpass seven figures again. All I've got to do is invest the whole portfolio in Treasuries yielding 4.5%+ for one year. Ah, the temptation to invest risk free!
Thankfully, in 2025, I'm back to being a 401(k) millionaire given the S&P 500 went up 23% in 2024 and the NASDAQ went up 29.5%. My 401(k) is 100% in stocks, and heavy in tech stocks.
Invest In Your 401(k) Aggressively And For The Long Term
Here's the thing. There have been zero contributions to my 401(k) since 2012 when I left my job. If there were, I would have contributed about $200,000 over 11 years, and my employer would likely have also contributed another $200,000. The $400,000 in contributions might have grown to $600,000, meaning my 401(k) balance would actually be closer to $1,595,000.
I also don't assume employer 401(k) matching or profit sharing in my 401(k) millionaire chart above either. Therefore, there's a high probability that you can become a 401(k) millionaire even sooner than my estimates.
Before you decide to retire early or leave your job for something new, please don't forget to calculate the retirement benefits you will be forgoing. Over time, it can add up to a significant amount.
Here's a post explaining why the median 401(k) balance is so low. In a nutshell, life gets in the way! If you want to build a comfortable amount of wealth for retirement, you must focus.
401(k) Balances Are Much Lower Than What's Needed For Retirement
As you can recall from the post, How Much People Want In Retirement, the amount of money survey participants thought they needed for retirement for all ages was $1.3 million. Meanwhile, the amount currently saved by all ages was $89.3K.
There's clearly a huge disconnect between what people want and what people will actually do to get what they want. Review the chart again below. It's a great cross reference, especially if you are skeptical about the low 401(k) balances across generations.
Based on the data above, the 401(k) is just not cutting it as a significant source of funds for retirement. The median 401(k) balance across all generations is only around $35,000, which is much lower than the median saved by all participants of the Northwestern Mutual online survey of $89,300.
The good news is that people are saving money outside of their 401(k). Money outside of tax-advantaged retirement accounts is the source of tappable passive investment income for early retirement or work flexibility. The other good news is that many employees have more than one 401(k) plan or have rollover IRAs, thereby increasing the likely overall 401(k) balances.
The bad news is that $89,300 is still way below what people think they need in retirement. Even if you 10Xed the median 401(k) balance across all generations to account for multiple 401(k) plans per person, you’d still only get $350,000. Yet, curiously enough, there is no ongoing retirement crisis.
The government has offered new retirement saving initiatives under the Secure Act 2.0. However, maybe the government doesn't need to do more if so many employees are already not taking full advantage. Here's the full Secure Act 2.0 document from the Senate if you're interest in all the details.
Stop Neglecting Your 401(k) Contributions
Even the average 401(k) balances by generation are not that impressive. Sure, having $145,500 in your 401(k) as a Gen Xer is better than nothing. But that money will disappear in five years if you spend just $30,000 of it a year.
If you find your 401(k) balance closer to the median or average balances for your age group, get fired up to start contributing more! Just think about your annual 401(k) contribution as a temporary pay cut that immediately shields your taxable income.
Age 59.5 will come sooner than you know it. When it does, you'll be happy you contributed as much as possible for decades.
If you can then build a nice taxable investment portfolio, a rental property portfolio, and a Roth IRA, you'll be golden when you no longer can or want to work.
Reader Questions And Suggestions
Why do you think the average and median 401(k) balances by generation are so low? Are people saving money for retirement elsewhere? Or are people simply not saving enough money for retirement? Could pensions, Social Security benefits, inheritances, and rollover IRAs be picking up the slack?
1) Diversify into real estate.
If you want to have financial freedom sooner, then only investing in a 401(k) is not good enough since it can't be touched without penalty until age 59.5. You must also build an investment portfolio that generates useable income today.
Consider investing in private real estate through Fundrise. Fundrise manages about $3 billion invested mostly in Sunbelt residential and commercial real estate, where valuations are lower and yields are higher.
I've personally invested over $300,000 in Fundrise to diversify my investments and generate more passive income. You can get started with as little as $10. Fundrise is also a long-time sponsor of Financial Samurai given we have the same philosophy of investing in the Sunbelt region where valuations are lower and yields are higher.
2) Track your finances diligently.
Sign up for Empower, the best free online financial tool to manage your 401(k). With Empower, you can x-ray your 401(k) portfolio for excessive fees, track your net worth, and better plan for your retirement.
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3) Subscribe to Financial Samurai.
Join 60,000+ others and sign up for the free Financial Samurai newsletter. You can also subscribe to my podcast on Apple or Spotify. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. I helped launch the modern-day FIRE movement.
Scenario: I’m 46 and my 401K now at ~$451K. My company matches up to 5% of what I put into my 401K each paycheck. I’ve been investing the max amount each year in my 401K. HOWEVER, I’ve neglected my Roth IRA (I.e. have put zero dollars into it in several years) in order to get my 401K contributions to 100%.
Dilemma: Should I focus on maxing my Roth IRA contributions OR max my 401K contributions? At this point, I cannot max both.
I just saw this article and thought about this post
Baby boomers are becoming homeless at a rate ‘not seen since the Great Depression’
https://moneywise.com/news/economy/rate-of-homeless-baby-boomers-increasing
Thanks for highlighting! I saw it too and was going to go back and look for it. Maybe Boomers are getting into more financial trouble after all.
Seems to exclude the Greatest Generation. What about them? We’re still alive for the moment.
What’s your 401k balance? The percentage of the population is pretty small now I guess. I hope you have lived a great life so far with few regrets!
Well you can invest and save all you want and die tomorrow never to enjoy it. Just do what makes you happy and enjoy life. So many people i know never reach retirement.
True. It’s just the fear of running out of money and having to depend on others or the government that’s the worry.
The 59.5 years of age is no longer valid. Now ypu can pull your 401k funds at age 55. The Rule of 55 makes this possible. There are other rules that allow as well. Strage, the author doesn’t mention this.
See The Rule Of 72(T) To Withdraw Earlier Penalty Free
In your opinion, I’d love to know how the rule of 72(t) affects the median 401(k) balance by age? I think only a tiny minority of people take advantage of this rule. Instead, most people just keep on investing in withdrawing past age 59 1/2.
My net-worth is $900k+ of which all retirement accounts add up to $350k+ which I think is decent for a mid-30s guy.
I’m putting 10% in to my 401k. My employer adds another 6%. I’ve been doing that for about 6 years. I even had it higher than 10% for a little while. My 401k sits at around 140k after 15+ years of work.
Do we realize just how bad the market tanked since Biden took office? I do some stocks, and many of them are still 60% – 80% down from 2 – 3 years ago.
Thoughts about investing more and investing more into index funds / ETFs instead of individual stocks? It’s hard to outperform indices long-term.
The S&P 500 is only about 6-7% below its all-time high. I wouldn’t blame a president for your stock portfolio performance.
Hi Sam…just curious, you mentioned you haven’t contributed to your 401k since you left your banking job. Have you ever explored the self employed (solo) 401k with Fidelity. As you probably already know, it has great benefit and higher contribution rate.
Yes. I opened up a Solo 401(k) in 2013 and contributed the max for several years with my random consulting income.
Then I opened up a SEP IRA.
Related: How to contribute $100,000+ a year to your retirement accounts pre-tax
Why is the average return on cash in table 2 for the period 1938-2020 only 1% ? Seems low unless these numbers are inflation adjusted. In which case the equity and bond numbers would be lower too?
Could be. But I remember the average cash interest rate at a bank being 1% per-pandemic for me. But the national average was much lower.
What return were you getting for your before the pandemic?
I have a 401k from Fidelity due to a new job I started last year, but this does not reflect my total 401k accumulated over 20 years of working full time which is dispersed across multiple administrators. Also 401k does not equal to net worth which includes roth IRAs, rollover IRA, personal savings, etc in addition to 401k. Would be interesting if anyone can get hold of net worth by generation
Thanks. Makes sense Fidelity’s number would be undercounting the true 401(k) balance and net worth. I don’t think anybody believes a 401(k) balance is equal to net worth either. It’s just one part of the three-legged retirement stool.
See: The Average Net Worth By Age
Always enjoy your insights & especiallynthise who open up in the comments..
Having lived through the 18% mtg rates & kept buying properties, I then experienced black Monday 1987. We never invested in equities again, but continued to build a portfolio of rental real estate. It helped having a great paying JOB, but admit RE on the side was a challenging, tough physical & financial draining beginning. I was told many times I would go bankrupt & never make money, but I retired after 17 years & never looked back (thanks to a great supporting to die for wife). We have been debt free since 1990 & everything we own is free & clear.
We both opted for 401(k)-solos & invested in RE & high interest rate seller financed notes as we sold off various investment properties.
We’re still buying, rehabbing then selling & holding notes @ 12%+. We continue to invest & finance fellow investor friends flips & it has paid off way beyond the 12%. The last flip netted 24.39% after 4 months & another will net 58% after 12months. We had not touched our ‘retirement’ income until the dreaded RMD clicked in.
My wife trained & imbued RE in our college educated kids, who all graduated loan free & owned their own homes (plus RE investments) a couple of years after graduating.
Admittedly we built, rehabbed their homes & hold all the financing at approved AFR’s.
You don’t have kids do you? Because if you did you would know 80K a year is not enough to pay for school and max your 401k. Lmk if I am wrong.
I have two kids. How about you? At $80,000, it’ll be tight, but doable.
We’re planning to go the free community college route and spend the $1.5 million we save on a better life and adventure now.
I stayed home with my three kids when they were young and early in our careers, the companies we worked for didn’t offer 401Ks, so we invested very little during those years. We’ve played catch up for the past 15 years with companies that provide pensions and 401Ks. Also, I work for a university that offers a tuition benefit for my family’s higher education, so that was a life saver.
These reports bother me a bit because they do not consider that people can have multiple accounts as Sam mentions. I am included there having an old 401k with Fidelity and a separate 401k with a similar balance from my current employer. It skews the averages lower making them look worse. Keep saving!
People just don’t start early enough, may not be disciplined in it or any other variety of reasons….excuses.
Since you have a relationship with Empower/Personal Capital, can you find out the average 401k/retirement balances and other after-tax investment account balances by age ranges there?
It might be more helpful for us to compare with our peers (i.e., people that take personal finance more seriously.
“…reasons…excuses”
Could you be more disgusting?
Insightful. Thanks for hating capitalism!
I took a look at my pitiful vanguard account, just hoping the sp500 doesn’t disappoint me in the next decade.
I have to assume IRAs and Roths, as well as 457s, all count. Then yes, there is not much excuse for not being a 401k millionaire (or almost double that if the spouse also worked) by the age of 60 or so, even with some huge setbacks at certain points.
That said, bear in mind that all the pre-tax retirement funds are subject to Federal and state income tax before you can lay hands on them. That means you probably don’t want to wait until RMDs (as late as age 75 for many of us) to start drawing on it all at once, or you could easily see yourself losing 30% (or more) of it to taxes if you are already in the 24% marginal tax rate (and this does not push you higher).
Also, it may or may not be a good idea to move to an income-tax free state after retirement, or at least for the years in-between retirement and RMDs, to try to convert as much as possible into backdoor Roths before RMDs kick in, at which point there is no point (you can’t convert RMD money into your Roth). The problem being you can’t covert too much in one year or you could cross into the Federal bracket that is currently 32%, an 8% hike from the previous bracket.
Even without crossing that line, 24% of the drawing being taxed away by the IRS, with potentially, say, 6% to 8% in state income tax (yours may be less, more, or none), and that million dollar 401k is really more of a 700k 401k.
Also keep in mind that a substantial collection of 401k funds keeps growing, even after you are drawing from it, and could conceivably rise to having to take out as much as a million a year–if you are well invested and live into your nineties. Which sounds great, although don’t get too carried away; taxes and inflation will make that a lot less than it sounds like and, with that much income, your Medicare will have gotten really pricey, along with your age having made your medical expenses really pricey.
On the other hand, you aren’t too likely to blow it all on mountain climbing, bungie jumping, and high speed race cars.
I think the low 401k amounts are true. In the area where I live I notice it when I go into the stores to shop. Once when I went into my local Dollar General (I still like to shop frugally) the cashier was no less than 85 years. MINIMUM! I think she was closer to 92+. In my local Lowes, workers over the age of 65 is the norm. One cashier that checked me out was suffering from back pain so badly (at least 70 years old or older) that she was using a cane at the cash register.
This is not a drill.
I’ve seen 75+-year-olds at the grocery story who can barely stand, trying to bag groceries too. Although I admire their ability to work, it is also sad. Where are their kids to help them? We need to help our parents.
My wife and I are both 36, live in SoCal and are DINKs. She has Aprox 330k in her 401k, maxes it out each year, and gets a 125% match up to 6% of her salary + bonus. Hard to pass up that free money!
On my side, we had an overweight 401k at my job so I kept getting the $$ back annually. We started putting it in RE. I ended up taking the remaining money during Covid as a hardship payout and continued investing it in RE. We have 4 SFH in heartland America (had 6 at one point but flipped a couple) all financed on 30 year fixed between 3-4%. Aprox 600k in equity (our portion) between the 4 of them (2 we own 100%, 2 we own 50/50 with a partner). Our cash flow portion is almost 3k a month on them. (Almost covers our $3300 a month mortgage on our primary!)
Our Primary is worth 2-2.1 which we owe 760k on, financed at 2.825% for 30. Realistically we do not need a bigger house even if we have children so happy to lock this up at this rate (bought in 2019 and refi’d since).
We have a 200k-ish in cash, which we are loving the 5.5% 3/mo treasuries and keep accumulating. Right now we can save 8-12k a month after tax income, and although I’d love to start investing in an after tax portfolio- it’s hard to pass up the treasuries at 5.5%, no state income tax, and no risk.
The million dollar question (no pun intended, well maybe :)), where do you put cash moving forward? I know we need some exposure to the market, and ultimately would have to retire early, though we have a long way to go for that. Creating cash flow and flexibility is our long term goal. Only debt is (1) car loan at 2.9%, which doesn’t make sense to pay off at this point. No student loan debt, and never had CC debt. Thank you in advance!
Probably best to diversify into stocks, Treasury bonds, and real estate. I love me some 5%+ risk free bonds.
Zillow has come out and believes in a strong 6.5% increase in home prices in 2024. Aggressive! But maybe true.
See: https://www.financialsamurai.com/how-id-invest-250000-cash/
Good job, well done. Inflation isn’t helping.
I do not have a 401k account, and never have had one due to the simple fact that all of my positions were either contracted because finding a job from 2008-2013 was quite tough, and that many companies require you to be there for at least 2-3 years before you’re vested in a company sponsored 401k. I have a Roth Contributory Account but that’s all, I’ve also endured long-term illness and personal matters including a parent’s suicide that occurred during my last semester of college. Most of all, most Americans struggle to make ends meet and the median is a better measure than the average….I think more than anything else the median demonstrates the true struggle of most Americans and the incredible burdens they face to just pay for their needs let alone save for retirement. I need close to $30k worth of dental work, yet my insurance will cover a max of $1k.. . it’s pretty hard to work when you experience consistent dental pain due to pre-existing conditions that you had no say over. I understand the markets, I have a good degree in business, but like so many other people, I’ve experienced a series of setbacks that you’re completely blind to. So, instead of blaming people and chastising individuals for not saving enough, you must force yourself to look at the bigger picture as to what is going on in each person’s life. You’re privileged to write this and to have had the health and career you did have…but most people will never experience this, including myself.
>>>1) Diversify into real estate. If you want to have financial freedom sooner, then only investing in a 401(k) is not good enough since it can’t be touched without penalty until 59.5. You must also build an investment portfolio that generates useable income today.<<<
I totally agree about building an investment portfolio that generates useable income today. Income pays the bills.
I've been retired for 17 years and have been investing in income CEFs (closed-end funds) for 22 years. After retiring, I converted my 401(k) to a traditional IRA. Using CEFs, I've had a steadily growing source of income since my retirement in 2007. Even during the recessions, my income was stable and my working capital increased. The whole strategy is outlined in a book coming out on Sept. 5. It's called Retirement Money Secrets and is authored by a retired, longtime investment manager.
What positions do you hold? I also invest in CEF’s that are for sale with a discount to NAV. Also invest in reits, BDCs, and mlp’s. Of course also some regular index funds in the taxable and Roth. I’m a teacher with a pension and about 12 years away from retirement (40now). Trying to build up income producing assets so I don’t have to be the 70 year old teacher trying to relate to teenagers!
I do feel like financial media has been beating this drum about lack of retirement savings since at least mid 2000s and maybe since turn of the century. But I really haven’t seen mass elderly homeless that you would have expected or at least mass movement of elderly to live with their children. Not seeing that either.
Personally, my 401k represents only 10% of my net worth, so my account is contributing to a false narrative.
To all that mentioned that the Fidelity survey is likely flawed due to people jumping from job to job and failing to consolidate their previous 401K/IRAs, you are very likely correct. However, as Sam mentioned, multiply the median x 10 and you are still left with a retirement savings deficit. Without making guarantees, I guarantee the vast majority of Americans are horrible savers and understand very little or nothing about personal finance. At work and in my social peer groups I am surrounded by many very highly educated and highly compensated individuals as well as blue collar workers, yet anytime I dare discuss personal finance issues/(early)retirement, they almost universally go cross-eyed, get lightheaded, and say to me, “what are you talking about, I don’t understand anything you are saying, I don’t like to think about that stuff,” or to the effect of, “well that’s what social security is for” or “my kids will support me if I need it.” I even have a close friend who is a managing director of global markets at BoA in Manhattan and she is making the mistake of having someone else manage all her accounts and gets hit with an AUM fee that will deplete her returns. Therefore, based on my unscientific anecdotal assessment, there is a retirement savings crisis in this country and we need to prioritize teaching basic financial skills to our young.
CMAC,
I have to agree with you about so many people being ignorant or scared to invest any funds for the future! In the 1970s, I remember t.v. commercials that encouraged the purchase of Savings Bonds.
I truly believe that ALL of America’s youth should be encouraged to LIVE WITHIN YOUR MEANS & invest for their retirement years!!
I noticed the trend of “young adults starting out in life expecting the very things it took their parents decades to achieve” happening in the mid 1990s. The past two generations need to wake up and get realistic about the “what happens if”!! MANY ARE A MEDICAL EVENT AWAY FROM HOMELESSNESS!
I maxed out my 401k for years and I’m a 401k millionaire. Yay! But I’m cutting back on contributions this year. I’m not making much money and I want to live it up a little.
My wife was a 401k millionaire. She should be back to that point in no time.
Fidelity’s data is dismal. I think most people will just have to keep working when they get older. Gen X is in trouble, IMO.
What about those older than boomers? What should they do?
Hopefully not much, thanks to their pensions and ability to collect 100% Social Security benefits.