Curious about the average 401(k) balance? Americans hold $6.6 trillion in assets in 401(k) plans, making the 401(k) one of the nation’s leading vehicles for retirement savings. Let’s look at some statistics that break down America’s 401(k)s, from participation rates to average balances.
Key Findings
- 72.21 million Americans are active participants in 401(k) plans.
- Approximately 14% of plan holders make the maximum contribution to their 401(k)s.
- Around 1.4% of plan holders have $1 million or more in their 401(k) accounts.
- The average 401(k) balance reached $87,040 in 2020.
- 39.9% of 401(k) participants had balances under $10K.
- The average 401(k) employer contribution rate is 4.8%.
- 39% of Americans start saving for retirement in their 20s.
- The median retirement age in the US is 62.
How Many Americans Have a 401(k)?
72.21 million Americans participated in 401(k) plans in 2020[1].
📖 Learn more: Understand the distinctions between 401(k) and IRA with our comprehensive comparison, ensuring you’re on the right retirement path.
Access to 401(k) Plans
Employers that offer retirement plans like 401(k)s are required to meet standards set by the Employee Retirement Income Security Act of 1974, or ERISA. This law does not require employers to offer retirement plans, and many, especially smaller employers, do not.
The percentage of American workers with access to a retirement plan has grown steadily, but 38% of American workers still lack this access.
Not all workers with access to a 401(k) plan actually open an account. The participation rate is the percentage of eligible workers that participate in the plan.
📖 Learn more: Curious about the best 401(k) choice for your needs? Our post breaks down the differences between Roth and Traditional options.
401(k) Participation Rates
In 2021, aggregate participation rates in 401(k) plans among Vanguard clients reached 82% (94% among plans with automatic enrollment, 63% among plans with voluntary enrollment) across all age groups[2].
How Many 401(k) Millionaires Are There?
Fidelity Investments had 299,000 clients with over $1 million in their 401(k) at the end of 2022, representing 1.4% of the 21.5 million accounts it manages[4].
How Many People Max Out Their 401(k)?
Around 14% of investors maxed out their 401(k) in 2021 ($19,500 in 2020), according to Vanguard data with a sample of 4.7 million participants[3].
Maxing out your 401(k) means that you contribute the maximum amount allowed by law in a given year. The maximum 401(k) contribution is $22,500 in 2023 ($30,000 for those age 50 or older).
Historical Contribution Limits for 401(k) Plans, 1978 – 2023
Average 401(k) Balance
According to the latest data available, the average 401(k) balance is $87,040[5].
Median 401(k) Balance
The median 401(k) balance reached $17,961 at the end of 2020 (across 11.5 million accounts included in the sample)[5].
📖 Learn more: Gain perspective on retirement readiness with our detailed overview of savings trends based on diverse factors.
Average 401(k) Balance by Year
In the period from 2004 to 2020, the average 401(k) balance saw fluctuations, starting at $56,878 in 2004 and reaching its highest at $87,040 in 2020, with a notable dip to $45,519 in 2008[6].
The significant drop in the average 401(k) balance in 2008 can be attributed to the global financial crisis, often referred to as the “Great Recession.” The 2008 financial crisis drastically reduced average 401(k) balances due to a stock market crash and widespread economic turmoil.
📖 Learn more: Considering options beyond a 401(k) for retirement? Our post outlines six alternatives worth evaluating.
Average 401(k) Balance by Account Size
In 2020, 39.9% of 401(k) participants had balances under $10K, while 11.4% had over $200K; the majority of participants had balances ranging between $10K and $100K, with each subsequent range accounting for a smaller share[7].
Average 401(k) Balance by Age
In 2020, average 401(k) balances ranged from $6,264 for those under 25 to $279,997 for those over 65, showing a clear increase with age.
For Americans over 65 years, the average 401(k) balance across Vanguard-managed defined contribution plans reached $279,997, more than in any other age group[3].
Average 401(k) Balance by Generation
Boomers (ages 59-77) have the largest average 401(k) balance at $215,000. That’s almost twice the average across all groups, which is $108,200 as of Q1 2023, according to Fidelity Investment data.
Those starting in their career (under 26) had the lowest average 401(k) balance of $7,100 in early 2023[8].
Average 401(k) Balance by Tenure
In every age group, workers who have been in their jobs longer have larger 401(k) balances. Workers who have moved from job to job may have multiple 401(k) plans, so these figures may not reflect total 401(k) balances[7].
Average 401(k) Balance by Income Level
Top earners with an annual income of over $150,000 had $397,882 in 401(k) balance on average, nearly twice as much as that earning between $100,000 and $149,999 ($219,651) among Vanguard managed plans[3].
Average 401(k) Balance by Gender
Analysis of Fidelity data shows that men, on average, have larger (401k) balances of $129,300. 32.25% larger than the average $87,600 among women[8].
📖 Learn more: Ensure your loved ones are informed; delve into our analysis of what transpires with a 401(k) upon death.
Average Contribution to 401(k)
The average employee contribution among workers 26-64 years old reached $5,510 (a contribution rate of 6.6%) as of 2018.
Average employed contributions varied between $3,579 (5.8%) to $7,669 (7.8%), depending on the age of an employee[9].
Unsurprisingly, top earners with a wage and salary income of $200,000 or more have the largest average contribution, at $18,433. They also have the lowest contribution rate, at 4.1%[9].
What Is the Average 401(k) Match?
As of Q1 2023, the average employer contribution rate (incl. profit sharing and matching contributions) reached 4.8%[8].
Many employers match the contributions of their employees. They receive tax breaks for doing this, up to a fixed level.
The most common 401(k) company match is a 100% match on the first 3% of the employee’s salary that is contributed to the 401(k) and a 50% match on the remaining 2%. Around 44% of employers using Fidelity 401(k) plans offer this formula.
The Average 401(k) Return Rate by Year
Assuming a portfolio mix of 60% stocks and 40% bonds, the typical 401(k) return rate ranges between 5% to 8% per year.
Largely due to stock market volatility, the AmericanTCS 401(k) Composite Benchmark reported an average return rate of negative 16.7% rate in 2022 but a positive 14.92% in 2021[10].
Over the past 5 years (ending in 2022), 5-year return rates reached 5.93% among the top 20% plans and 3.63% among the bottom 20% plans[11].
Here’s a detailed breakdown of a 5-year return 401k performance by plan:
