Planning for retirement is different for everyone, so your savings goals might not match those of your peers. Nonetheless, understanding the average savings rates can provide insight into your own financial situation as you approach retirement.
Below, we outline the average 401(k) balances for those nearing retirement age, along with a straightforward tip to enhance your savings.
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Contrary to Expectations: Average American Savings Are Low
The 2024 How America Saves report released by Vanguard sheds light on the financial health of the average American. This report includes data on the average and median 401(k) balances among its participants.
For those aged 55 to 64, the average 401(k) balance stands at $244,750. However, the median balance offers a more realistic view of typical savings behavior.
The average can be inflated by a few individuals with significant assets, while the median indicates where half have saved more and half have saved less. According to the report, the median 401(k) balance in this demographic is only $87,571.
Maximizing Your Savings Made Simple
While a balance of $87,571 is a substantial amount, it may not last long once you retire. If your savings are lagging, one of the simplest actions you can take is to maximize your company’s 401(k) match.
The Vanguard report notes that the most common matching structure is 50% of a worker’s contributions up to 6% of their salary. Utilizing this benefit can significantly increase your savings—potentially adding thousands of dollars each year. If you don’t contribute enough to receive the full match, you might be missing out on free money.
Saving for retirement can pose challenges, but employing straightforward strategies can enhance your financial prospects. With thoughtful planning, you may be able to save more effectively than you ever imagined.
Forgotten $22,924 in Social Security Benefits
If you find yourself behind in your retirement savings, you are not alone. Many Americans are unaware of certain “Social Security secrets” that could elevate their retirement income. One specific strategy could net you as much as $22,924 annually! By learning how to optimize your Social Security benefits, you can approach retirement with greater confidence and peace of mind. Click here to discover more about these valuable strategies.
View the “Social Security secrets” »
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