Americans Should Have $200K in Their 401(k) Accounts by Age 50

Experts say Americans in their 50s who’re occupied with retiring must have a median of $212,400 in their 401(k) accounts, which is rather more than the typical median in the quantity of $64,300, based on

Financial experts at financial planning firm Charles (*50*) found that the typical American believes they need to have $1.8 million put aside in a 401(k) plan, an employer-sponsored retirement vehicle that enables employees to contribute pre-tax income toward retirement.

But data from Fidelity Investments showed that those numbers vary by age bracket. For Americans in their 40s, the typical is just over $124,000, while the median is just $41,600 for a 401(K) — Americans in their 30s make a median of over $56,000, while the median is under $23,000.

Finally, Americans in their 20s fall in the $17,700 bracket, with the median 401(K) contribution being $6,700.

The numbers also rely on who has a 401(K) account, as an AARP study found that 20% of adults age 50 and older say they haven’t any retirement savings in any respect. AARP Senior Vice President of Research Indira Venkateswaran said the shortage of savings is as a result of the rising cost of living.

“Daily expenses continue to be a major barrier to saving for retirement, with some older Americans saying they never expect to retire,” Venkateswaran says.

Another reason is the structure of the pension. Fidelity “The State of Retirement Planning in 2024” the study found that just about 60% of Americans plan to proceed working, at the least part-time, in retirement. Retirement expert Anne Lester says this mindset is helpful in two distinct ways: it allows retirees to save lots of more and it allows savings to last for a shorter time frame.

“This means you can save more, and your savings will need to last a shorter period of time because your years in full retirement will be shorter,” Lester said.

“So you would actually need less money than you would otherwise need.”

The expert also added the potential for using Social Security advantages. The earliest Americans can start receiving Social Security advantages is age 62, but depending on their date of birth, they might must wait until full retirement age to receive 100% of their advantages.

The full retirement age for people born after 1960 is 67. Lester says the delay is helpful because Social Security advantages increase by 8% annually an individual waits to achieve full retirement age and age 70.

“There’s a triple benefit to waiting for retirement,” she said. “You have more time to save, you have a smaller amount you have to save, and your Social Security income will be higher.”

People over fifty who’re approaching retirement should reap the benefits of this chance catch up and maximize your 401(K) savingsExperts say to finalize your retirement goals, proceed saving as much as possible, and avoid high-risk investments.