How much should be in a 401(k) depends on your age, income, and retirement goals, but there are common guidelines to target:
- By age 30, aim for about 1 times your annual salary saved. For example, if you earn $75,000, you should have about $75,000 saved in your 401(k).
- By age 40, target around 3 times your salary saved.
- By age 50, 6 times your salary is suggested.
- By age 60, strive for 8 times your salary, increasing to 10 times by age 67 for a comfortable retirement.
- Many experts recommend saving 15% of your pretax income annually in your 401(k), including any employer contributions, to stay on track.
- Some also use the "Rule of 25," which means having saved 25 times your expected annual retirement expenses by the time you retire, for example, $1 million if you expect $40,000 yearly expenses.
Average balances by age also show general progress benchmarks:
- 20s: around $20,000 to $91,000 average
- 30s: around $60,000 to $180,000 average
- 40s: $90,000 to $370,000 average
- 50s: $160,000 to $590,000 average
- 60s: $180,000 to $570,000 average
Your personal goal may vary based on your salary, retirement lifestyle plans, other savings, Social Security, and healthcare costs.
In summary, a good rule is to target accumulating a multiple of your salary (starting at 1x at age 30 to 10x by retirement age) in your 401(k) for retirement readiness, with annual contributions around 15% of your income. Adjust based on personal circumstances and retirement goals.
