This Is the Average 401(k) Balance for People Ages 45 to 54

Comparing yourself to another investor isn't always helpful. That person may have a different starting point than you, or perhaps a differing degree of risk tolerance. It's all too easy to jump to an errant conclusion based on where you stand relative to anyone else.

Comparing yourself to everyone else, however, is a different story. This sort of yardstick lets you know how you stack up against the average person, and therefore reveals potentially useful feedback about your saving and investing habits.

To this end, let's consider the 401(k) balances of the typical American in the 45- to 54-year-old demographic today.

There's a big difference between mean and median

The data comes from retirement plan service provider Vanguard Group. As of the end of 2023, participants in Vanguard's 401(k) plans between the ages of 45 and 54 had an average balance of $168,646. Not bad.

That figure comes with an important footnote, however: The average is skewed higher by a relatively small number of very, very big account balances. The median value of all of these 401(k) account balances -- that is, half of those 45- to 54-year-olds had more, and half had less -- was $60,763. That's a far cry from the overall average.

Worry less about them, and more about you

If you've got more in your 401(k), great! Just don't celebrate too much too soon. That's still not enough to fully fund a comfortable retirement. And if you've got less than the median figure -- well, don't worry. You've got some time to catch up.

Regardless of where you stand, the most important action you can take next is making or updating a detailed savings plan that works for you and your goals. Then, do whatever it takes to stick with that plan. The most financially secure retirees aren't necessarily the ones who started with the most money or had the highest incomes. They're usually the folks who were the most disciplined and patient during their careers, when they were contributing to their 401(k) plans and investing for their golden years.

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