The Common 401(okay) Stability for a 50-Yr-Previous Might Shock You. How Do You Examine?

As soon as you’ve got hit age 50, there is a good probability you’ve got been saving cash for years, if not a long time. However how a lot ought to you’ve stashed away by this age? Everybody’s monetary scenario is exclusive, which makes the best sum of money it’s best to have saved troublesome to pinpoint. Nonetheless, understanding how your friends are doing may help you establish when you’re heading in the right direction.

In 2023, retirement plan members between the ages of 45 and 54 had a median stability of $168,646 and a median stability of $60,763, in line with Vanguard’s annual “How America Saves” report.

The Common 50-Yr-Previous’s 401(okay)

Vanguard, Constancy, and Empower repeatedly report common retirement account balances by age, however all of them report on completely different numbers. Here is what they’ve discovered:

• Vanguard’s 2023 report exhibits that retirement plan members aged 45 to 54 had a median stability of $168,646. The median—half of the savers had greater than this quantity of their accounts, and half had much less—was considerably decrease at $60,763.
• Empower, utilizing information from its monetary administration software as of Dec. 31, 2024, reported that the typical 401(okay) stability for somebody of their 50s is $592,285, whereas the median stability was $252,850.
• Constancy Investments mentioned in its “Constructing Monetary Futures” presentation revealed within the third quarter of 2024 that the typical stability for Era X—these born between 1965 and 1980, together with 50-year-olds—is $191,900.

How A lot Retirement Financial savings You Ought to Have by Age 50

The sum of money it’s best to have saved by age 50 will depend on your objectives and way of life. Nonetheless, there are some common tips you may observe. Constancy recommends having six occasions your wage saved by age 50, whereas T. Rowe Worth suggests having three-and-a-half to 6 occasions your preretirement gross revenue saved.

While you hit age 50, retirement is (ideally) on the horizon, so it is a good time to contemplate the 80% rule. This rule suggests it’s best to purpose to avoid wasting sufficient to exchange 80% of your preretirement. For instance, in case your wage is $80,000, you’d need to have saved $64,000 for every year of retirement to keep up your way of life. A monetary advisor may also assist decide how a lot that you must save primarily based in your particular monetary scenario and objectives.

Suggestions for Catching Up on Retirement Financial savings

When you’re in your 50s and concern that you simply’re behind in your retirement financial savings, you are not alone. Roughly 20% of adults age 50 and older haven’t any retirement financial savings, and 61% are nervous they won’t have sufficient cash to help them in retirement, in line with a survey from AARP revealed in 2024. When you’re involved, listed below are three suggestions for catching up on retirement financial savings.

• Max out your 401(okay). In case your employer affords a retirement financial savings plan, take full benefit. An employer-sponsored retirement financial savings account comes with tax benefits and, most occasions, an organization match. Even when you’re late to contributing, maxing out your 401(okay) every year for the remaining years of your working years could make a giant distinction.
• Contribute to a Roth IRA. A Roth particular person retirement account (IRA) allows you to contribute after-tax {dollars} that you would be able to withdraw tax-free in retirement. So long as your modified adjusted gross revenue (MAGI) would not exceed the boundaries set by the IRS, you may contribute to those along with your 401(okay).
• Faucet into your own home fairness. Properties might be greater than only a place to reside: They’ll additionally provide liquidity in retirement. A House fairness line of credit score (HELOC), house fairness loans, and reverse mortgages are in style methods for deriving revenue from your own home.

The Backside Line

How a lot it’s best to have saved by age 50 varies primarily based in your private monetary scenario, objectives, and way of life. However having three-and-a-half to 6 occasions your preretirement gross revenue saved is an efficient benchmark. When you’re late to saving, contemplate maxing out your 401(okay), contributing to a Roth IRA, and exploring choices to faucet into your own home fairness.