Here's how much Americans have saved in their 401(k)s at every age
Only 1.6 million people withdrew money from their 401(k) under the CARES Act since March, according to data from Fidelity.
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Here’s how much Americans have saved in their 401(k)s by age group
- Thread starter Forerunner
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There are other retirement vehicles, Roth IRA for example, that people use, so I dunno how relevant those figures are. That being said my gf and I put in the max match % for both of our employers, doesn't really make a whole lot of sense to exceed that.
How useful is the % of income metric? Because the actual person's income affects the percentage and adds so much noise to the stat.
I started my 401k at the beginning of this year because I finally became eligible. I'm maxing out because I don't pay any bills and don't have any debts, but if I ever move out I'll have to stop. Hopefully by this year I'll be above the average for my age group (25-30).
I'd be more interested in seeing the median numbers rather than averages because the super wealthy will skew averages to make things look a lot rosier than they are in reality.
Same, but I'm older. Hard to put more when life is so damn expensive
It's relevant in the sense that if you want to have a retirement income that's a certain proportion of your salary then you will need to put in a certain percentage of your salary each year in order to have a decent chance of achieving that. That percentage will depend on how much you already have saved and how long you have to go until retirement.
It's a retirement savings account that has some tax benefits. If your employer doesn't offer one, you can get yourself a Roth IRA. Put in as much as you can as early as you can. If a child born today is given 12,000, they will have their entire retirement taken care of with the most basic of investments (index funds).
We have a topic on this: https://www.resetera.com/threads/retirement-era-ot-how-to-invest-for-retirement.1453/
Actually 401(k) contributions are limited to $19,500 per year... so someone making $250K a year can only contribute 7.8%. It's not the super wealthy skewing things here.
Never seen that exact number ($12,000) like that. Always assumed it was a crazy low (relatively speaking) number, but wow. Set aside $200/mo for 5 years from ages 25-30, then have a kid when you're 30, and you just set them up for retirement.
Yeah, that's my first thought. I really doubt that the average for all 20-29 year olds is $15,000 savings; there are a lot of 20-29 year olds who do not have a 401k.
That's effect of compound interest. Roughly every 7 years your money doubles with market returns. $1000 you put away at 19 turns into $8000 dollars at 40.
Damn the American retirement system is so broken as fuck and most of the people who even have 401ks are still going to find it doesn't go anywhere near as far as they will need. I still don't understand how they even pushed the 401k idea so far, if I remember correctly the original plan of 401ks was to be an extra on top of other suitable pensions via work and such, but of course that had to be transformed into the system where they were instead the main thing is the retirement plans and sadly a lot of people will find they are either working until they die or find out that all the money set aside all their lives wasn't as good as a pension would have been.
Who knows? The article hasn't bothered to source the chart other than saying it's from Fidelity, so there are a whole load of questions that can't be answered here, which is unfortunate (and quite frankly, shit journalism).
Yep, so if you wait until you are 30 before starting a retirement savings plan, assuming constant returns and constant level of contributions, you will end up with half as much at retirement as if you'd started in your early 20s.
I'll be 39 and I'm scared if I'll make it to 65. I really want to retire before 65, too. I have about 30k in my 401k. I'm contributing 16% of my income per pay period to my 401k.
I have a taxable account and Roth. I put $500 a month towards my Roth. I opened my Roth last March. I have a total relationship value for my taxable account and Roth about $50k.
ive been told it's not too late for me due to my age. But we'll see. The goal is to make more money and move up.
I have a taxable account and Roth. I put $500 a month towards my Roth. I opened my Roth last March. I have a total relationship value for my taxable account and Roth about $50k.
ive been told it's not too late for me due to my age. But we'll see. The goal is to make more money and move up.
Oh for sure, it's just seeing that flat number at birth being the number you'd need to roughly retire gives me some extra motivation to try to set aside a chunk like that for my future kid. Easier said than done, but nice to have a few more financial goals.
I have 403(b) and 401(a) accounts through my employer (basically the same as a 401(k)). I contribute the maximum to my 403(b), and my employer contributes 10.5% of my yearly salary to my 401(a). I also have a Roth IRA that I max out, and a taxable account that I put money into every now and then on top of that.
I'm hoping to retire in my 50s.
Here's a very illuminating article that someone has linked to before: https://fourpillarfreedom.com/the-math-behind-why-net-worth-goes-crazy-after-the-first-100k/
For those who have retirement accounts and are able to contribute to them... don't squander that opportunity.
I'm hoping to retire in my 50s.
Here's a very illuminating article that someone has linked to before: https://fourpillarfreedom.com/the-math-behind-why-net-worth-goes-crazy-after-the-first-100k/
For those who have retirement accounts and are able to contribute to them... don't squander that opportunity.
Yeah, so even then, there's way more variables involved to make this one meaningful. It's much easier to say, "you can retire with x lifestyle if you put in a flat y amt every year" vs "if you put in x% of your salary, you can have a retirement in accordance to what your salary was when you put x%, etc etc etc"
Depending on how much you like your job, that would be grounds for finding a new one. When we used a shitty 401k provider that would skim 2% off the top, we joked that leaving the company would be the highest payout move we could make for retirement.
Employer only matches 4% (or maybe its 6%), but I put in 10, still doesn't feel like I'm setting aside enough.
I haven't contributed as much lately, but I contributed like mad during the first 10 years I was out of college, so I'm well ahead (~2.5x average) now.
The second picture is odd without a caption... how much Americans are contributing, but a percentage? The article says:
"Below, check out the average amount of money Americans have saved in their Fidelity accounts as of the fourth quarter of 2020, as well as how much their contributions are in relation to their salaries."
Personally, I don't contribute a percentage of my salary (that's not my worry). I contribute the max I personally can (~$19.5k), and don't worry about employer matching (though employer matching last year for me was a bit over $4k). It's also important to me to contribute max to an IRA, even if there's no benefit (compound interest is my benefit).
I'm also curious if just using Fidelity's data is sufficient. I'd also rather see 401k+IRA balances, not just 401k.
I will say that I'm grateful that by Fidelity's numbers, my savings for retirement appears to be well-ahead relative to the average for my age group. I'm also overly-saving though, being as I have also a pension in addition to my IRA, SS, and 401k plan.
I always felt like I started savings really late (I didn't start seriously contributing until I was in my mid 20s), and I know for my children I'm going to get them set up with an IRA as soon as they're 14/15 and manage it for them.
In my early 20s, although I had a 401k, I ended up taking some money out and didn't put it back for a few years. I really regret that. Compound interest is amazing. My parents, namely my dad, taught me very early on I needed to have a 401k and IRA account and save. However, he left me alone for the most part about what that meant. I'm going to take what he taught me, add my own knowledge, and go a step further for my kids.
Although I feel like I made some mistakes, I'm hoping to set up my kids with IRA accounts around 14/15, and even if they only save $2k a year then, it'll be worth so much more at 60, like what GameDev stated.
(And if anyone else here is worrying about your kid's retirements like I do, a rothIRA can be passed onto them without worries of RMD, while a trad IRA can't, so I'd recommend a rothIRA for that reason.)
"Below, check out the average amount of money Americans have saved in their Fidelity accounts as of the fourth quarter of 2020, as well as how much their contributions are in relation to their salaries."
Personally, I don't contribute a percentage of my salary (that's not my worry). I contribute the max I personally can (~$19.5k), and don't worry about employer matching (though employer matching last year for me was a bit over $4k). It's also important to me to contribute max to an IRA, even if there's no benefit (compound interest is my benefit).
I'm also curious if just using Fidelity's data is sufficient. I'd also rather see 401k+IRA balances, not just 401k.
I will say that I'm grateful that by Fidelity's numbers, my savings for retirement appears to be well-ahead relative to the average for my age group. I'm also overly-saving though, being as I have also a pension in addition to my IRA, SS, and 401k plan.
I always felt like I started savings really late (I didn't start seriously contributing until I was in my mid 20s), and I know for my children I'm going to get them set up with an IRA as soon as they're 14/15 and manage it for them.
In my early 20s, although I had a 401k, I ended up taking some money out and didn't put it back for a few years. I really regret that. Compound interest is amazing. My parents, namely my dad, taught me very early on I needed to have a 401k and IRA account and save. However, he left me alone for the most part about what that meant. I'm going to take what he taught me, add my own knowledge, and go a step further for my kids.
Although I feel like I made some mistakes, I'm hoping to set up my kids with IRA accounts around 14/15, and even if they only save $2k a year then, it'll be worth so much more at 60, like what GameDev stated.
(And if anyone else here is worrying about your kid's retirements like I do, a rothIRA can be passed onto them without worries of RMD, while a trad IRA can't, so I'd recommend a rothIRA for that reason.)
