The Average 401(k) Balance by Age, Income Level, Gender, and Industry

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• The average 401(k) balance is $129,157, according to Vanguard's 2021 analysis of over 5 million plans.
• But most people don't have that much saved for retirement.
• The median 401(k) balance is significantly lower at $33,472, more reflective of how most Americans save for retirement.

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A 401(k) account is an employee-sponsored retirement vehicle that allows you to contribute pre-tax income towards your retirement. A 401(k) lets you lower the amount of income you're taxed on and lets your funds grow tax-free.

In 2020, the average 401(k) account balance was $129,157, an increase from 2019's $106,478 average, according to Vanguard data.

Each year, Vanguard analyzes account data from 5 million retirement accounts. Across these accounts, the typical account balance varies widely by the method used to calculate it — while the average 401(k) savings balance is well over $100,000, the median account balance is much less at $33,472, according to Vanguard's latest data.

The amount you save up toward retirement depends on how long you've been saving and how much of your annual income you can afford to put away (you can check your own numbers with our retirement calculator). The Vanguard data broken down by demographics demonstrates as much, showing a wide range of average account balances across various age ranges, income levels, industries, and gender. Here's a breakdown of those balances.

Average 401(k) balance by age

Retirement savings grow with compound interest, which means account balances increase with time. Like other types of retirement accounts, money saved in a 401(k) grows like a snowball, with interest earning interest on itself. The older you are, the more time you've had to build up your savings.

Note: In 2022, employees can contribute up to $20,500 in their 401(k). Employees over 50 can contribute an additional catch-up contribution of $6,500. 

With compounding interest, the earlier money is put into an account, the more opportunity it has to grow, and the greater the possible returns. In retirement accounts like 401(k)s, building retirement savings early means a greater opportunity for growth. 

Here's the average amount people have saved for retirement by age group, according to Vanguard's data.

Average 401(k) balance by income level

Vanguard's data shows that 401(k) balances are greatly influenced by annual income. Across all age groups, the amount people save for retirement increases with their earnings. 

The most significant increase in 401(k) balances comes after the $50,000-per-year mark. While workers earning between $30,000 and $49,999 per year have a median balance of $10,439, workers in the next-highest bracket earning between $50,000 and $74,999 have a median balance of nearly three times larger, at $28,880.

Here's the annual income compared against the average 401(k) balance and median 401(k) balance:

Average 401(k) balance between men and women

On average, men save more for retirement than women. 

Across all age levels, Vanguard's data indicates that women have a median 401(k) account balance of just over $10,000 less than that of men. A 2020 report from the Bureau of Labor Statistics shows that the average woman makes 82 cents for every man's dollar, affecting how much women are able to put away for retirement.

While a large disparity in savings exists, women often need greater retirement savings than men to retire comfortably. Women tend to live longer and could therefore need more long-term care than men, which could require greater spending in retirement.

Average 401(k) balance by industry

According to Vanguard data, balances also vary widely among industries. One possible explanation for this is that retirement-savings matches, in which an employer matches an employee's contributions to their savings up to a given percentage, may be more common in some industries than others. Earnings could also affect how workers in a specific industry save.

Here's how the average balances break down by industry, according to Vanguard's data.

People who work in agriculture, mining, and construction contribute a significant amount to retirement, with the average industry worker's account balance well over $170,000. However, teachers and healthcare workers, and people who work in wholesale and retail, tend to lag behind, with average account balances under $90,000.

How to catch up on retirement savings

If you feel like your retirement savings aren't at the level they should be, there are tactics you can use to get caught up.

One of the most effective is to find ways to reduce your discretionary expenses or increase your income. Take the money you save or the additional money you earn and use it to beef up your retirement accounts.

Fully funding your retirement accounts by making the maximum allowable contributions in any given year will also help get you on track to a level of savings that will provide a steady stream of income when you're finished working. The amount you can contribute will vary depending on your age and the type of account you have.

You might also consider adjusting your retirement timeline. Pushing back your retirement date not only allows you to put more on your employment income aside for retirement but also may increase the amount you receive in Social Security benefits.

Personal Finance Reporter

Associate Editor at Personal Finance Insider

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