As workers get older and continue on their career paths, in theory, their 401K should reflect that and go up. So, the average and median amount of money that people have in their 401Ks end up being a factor of how long they’ve worked (their age). It’s also, of course, a factor of how much money they make and put into their 401Ks. So, have you ever wondered if you have more or less in your 401K than most people your age?
Let’s get into retirement details. According to Fidelity, “The age you plan to retire can have a big impact on the amount you need to save, and your milestones along the way,” they state on their website. “The longer you can postpone retirement, the lower your savings factor can be.” They add that if you delay saving, your savings will take a longer time to grow.
Also, if you’re wondering how much money you need to retire comfortably, that really is different for everyone. You have to look at how you want to live in your retirement. Do you want to have lots of extra money to travel? Or, would you rather retire earlier with less and live a less elaborate lifestyle?
According to Citizensbank.com, you want to have enough money to make up 60% to 100% of your pre-retirement annual income. “This rule of thumb aims to maintain a quality of life similar to the one you enjoy immediately prior to retirement, while keeping in mind the realities of different budget levels per line item, like lower work-related and housing costs likely offset by higher healthcare costs,” they explain. They also say that “becoming a ‘millionaire’ is still an impressive financial milestone, but $1 million today doesn’t go nearly as far as it did in 1980, when $1 million had the same buying power as $3.1 million today.”
Now, let’s get into the question at hand. How does your retirement savings hold up to those in your age group? Here are some details from Vanguard.