How much the average 401(k) investor has saved at every age

Last year was a banner year for retirement savings: Individuals with retirement accounts broke new savings records, according to Vanguard.

In fact, the average Vanguard account balance for defined contribution plan participants—which include those who can contribute to a 401(k) or 403(b), among other types of accounts, at work—hit $141,542 in 2021, according to Vanguard’s annual How America Saves report for 2022.

That said, the figure is skewed by a small number of “longer-tenured, more affluent, or older” accounts. The median was $35,345, which more closely represents the typical saver, Vanguard says. Three in 10 participants had an account balance of less than $10,000 in 2021, while 3 in 10 also had balances of more than $100,000.

These balances vary depending on income and savings rate, of course, but also time in the market. Gender and industry are also important factors, says Vanguard.

The company credits the record-breaking savings to features like automatic enrollment in retirement plans and automatic contribution escalation. It also notes that average balances increased 10% compared to 2020, thanks to a soaring stock market in 2021. Those record-breaking gains might not be repeated this year, given the current state of the market.

Automating participation in savings plans, rather than waiting for individuals to contribute or increase their savings rate on their own, has been shown to be one of the best tools to increase retirement savings. Congress is currently working on a bill that would mandate automatic enrollment for all but the smallest employers.

Of course, not everyone has access to a workplace retirement plan. Traditional and Roth IRAs can help make up some ground, but they have lower annual contribution limits, so they are not a 1:1 replacement for 401(k)s.

The ideal retirement savings rate is 12% to 15% of your annual income (that includes an employer contribution, if you get one), according to Vanguard. The average deferral rate for Vanguard savers was 7.3% in 2021, and 11.2% when the employer contribution was taken into account. But even if you can only save a little bit each year, that’s better than nothing. Start small and you can build over time.

Financial planners are split on how much people will need saved to live comfortably in retirement, and of course the exact number will vary greatly depending on your lifestyle and other needs you might have in your nonworking years. Some put the number at $3 million, while many put it much lower.

Here are the average and median 401(k) or 403(b) account balances by age in 2021, according to Vanguard.