Average 401k Balance For RetireesWhat is the average 401k balance for retirees? It is normally a great idea to invest as much money as you can into your 401k plan, but sometimes it is nice to get an idea of what the median 401k balances are so that you can compare yourself with them. So, here are the median 401k balances for people at retirement age in different income brackets. • For people who earn between 20-$40,000 a year the median 401k account at retirement is $64,147 • For people who earn between $40-$60,000 a year the median 401k account at retirement is $97,588 • For people who earn between $60-$80,000 a year the median 401k account at retirement is $160,051 • For people who earn between $80-$100,000 a year the median 401k account at retirement is $237,303 • For people who earn over $100,000 a year the median 401k account at retirement is $350,576 Of course there are always people on the far side of each plan. A study in 2006 found that 43% of workers over the age of 55 had less than $25,000 in their 401k. These suggest that a high number of people don’t or can’t take full advantage of their plan. Those who can and do probably bring the average up. How Much Do You Need? Those were the demographics of 401k balances, but how much do you actually need for retirement? The same study in 2006 found that 30% of Americans believe they will need under $250,000 to live comfortably after retirement. 40% of Americans say they need over $500,000 to live comfortably after retirement. Actually, it depends on what “comfortably” means to you as well as how much money you have coming in from other retirement sources (such as Social Security) and other investments (such as a private trading account). A simple way of figuring out how much you need is by finding out how much you need to pull from it every year and multiplying it by the amount of years you expect to live. (It doesn’t sound like an equation you ever really want to do, does it). Or you could invest it wisely and hopefully pay for your bills off of the interest, but then you have to figure out how much you need to have to make say $30,000 a year off of interest alone. We know the average 401k balance for retirees and have a basic idea of how much we need. The next step is to contact your 401k provider, if you don’t know who this is you can find it at your employer’s human resources section. Your 401k provider will have all of your account information such as, interest earned, deposits, and account balance. It will help give you an idea of where you stand as well as how much you need to save to reach your goals. Resources Compare our 401k Balances With Others
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