According to the Alliance for Lifetime Income, 2024 will see the greatest surge of Americans turning 65. In fact, about 11,200 Americans are turning 65 each day. This means that more people are closer to or entering retirement than ever before.
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Curious about how your retirement fund compares to others in your age group? In this day and age, knowing your financial standing is really important.
To help, Humphrey Yang, a well-known TikTok finance expert, explained the average 401(k) balances and how much people put in, by age group, in a video he posted last year. Here’s how much you should have saved for retirement by age group, according to Yang.
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If you’re a young adult, the start of your career is a vital time to lay down the groundwork for retirement savings.
Yang said a typical 401(k) amount for ages 18 to 25 is $6,264, median being $1,786. It’s vital to commence early, but he also advised to aim beyond the average contribution of 7%.
Strive for approximately 15 to 20% of your total earnings to ensure a respectable retirement.
If you’re moving into your late 20s to early 30s, the goal becomes retirement savings.
The average 401(k) balance for this group is $37,211. Contributions also rise a bit to around 8%. Try saving 1.2 times your yearly salary by 30. It can provide a sturdy base for future expansion.
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Middle-aged individuals find themselves needing to save even more. If you’re in your late 30s and early 40s, you should ideally have at least 2.6 times your annual income saved for retirement.
With an average 401(k) balance of $97,020 and a median of $36,117, focusing on debt elimination and understanding future retirement expenses becomes crucial.
Some people in this age group are within a decade of retiring. If you’re age 45 to 54, you should set a retirement savings goal of 8.2 times your annual income by age 60.
Despite an average 401(k) balance of $179,200, Yang emphasized the importance of debt elimination and careful retirement planning to ensure a comfortable future.
This age group is about to call it quits. If you’re age 55 to 64 and retirement is around the corner, you should aim to have 10 times your annual income saved for retirement by age 65.
