If You've Got This Much Money in Your 401(k), You're Ahead of the Average Saver

If you recently caught a glimpse of your neighbor driving a new, fancy sports car down the street, it may have triggered a thought in your head along the lines of, "Hmm, I wonder what kind of salary he's pulling in."

It's natural to be curious about other people's finances. And while possessions like nice homes and cars aren't necessarily indicative of savings levels or financial health (hello, massive debt that many people take on), seeing how much money the average American has in their 401(k) plan might give you a good sense of where the typical retirement saver is at.

So without further ado, Vanguard reports that the average 401(k) balance in 2023 was $134,128. That's a 19% increase from 2022, fueled jointly by market gains and ongoing contributions.

Image source: Getty Images.

If you feel like you're behind savings-wise, there's more

While $134,128 was the average 401(k) balance in 2023, Vanguard reports that the median balance was only $35,286. In case you slept through Statistics 101 in college, here's a refresher.

When you have a median that's considerably lower than an average in any given data set, it's generally indicative of the fact that the median is more representative of your sample size. To put that into plain English, what these numbers tell us is that $35,286 is probably closer to what the typical saver has in a 401(k). However, the average savings balance may be $134,128 because a smaller percentage of very high balances are bringing that average up.

As such, don't despair if your retirement plan balance is nowhere near $134,128. And also, take your age into account -- and give yourself some grace if you're fairly young and haven't been saving all that long. A balance in the ballpark of $35,286 is perfectly respectable if you've only been funding a 401(k) for a handful of years.

How to boost your 401(k) balance

So now that you've seen what the average 401(k) balance looks like, you may be more motivated to try to boost yours. And hey, that's a good thing.

First, figure out what employer match you're entitled to, and go after it. If you're not snagging that match in full, you're leaving free money on the table.

Remember, too, that money your employer kicks into your 401(k) can be invested. So a $3,000 contribution this year on your employer's part could leave you $30,000 richer in 30 years if it's invested at an average annual 8% return, which is a bit below the stock market's average .

Next, consider a side hustle. It may eat up a bit of your time, but it could also be the trick to drumming up more cash for your long-term savings. And the nice thing about many gigs is that they're very flexible, so if you have a week when you're swamped, you can often opt out.

Finally, make sure your 401(k) is invested appropriately for your age. If you're in your 30s, you don't want all of your money in a bunch of slow-growing bond funds. You may not even want your money in a target date fund , either, even though these are popular among 401(k) savers. Target date funds tend to err on the side of investing conservatively, which might mean slower growth.

You may instead want to put a good chunk of your 401(k) into an S&P 500 index fund . This way, you can harness the growth of the broad market without having to pay the costly fees, known as expense ratios, that target date funds tend to charge.

So there you have it. The average 401(k) balance is $134,128, but we know that doesn't tell the whole story. Rather than get worked up over that number, take it as an interesting point of information and use it to motivate yourself to ramp up your savings game.

The Motley Fool has a disclosure policy .