Here’s The Average 401(k) Balance Of Americans In Their 30s

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If you’re in your 30s, retirement can still feel like something you don’t have to start thinking about just yet. However, the sooner you start investing for retirement, the more time your money has to grow. Which is why if you’ve been automatically contributing a portion of your paychecks into a 401(k) account, you’ve already been taking very crucial steps to set yourself up for the future.

Select used information from Vanguard’s 2021 How America Saves Survey to look at how much money the average American in their 30s has saved up in their 401(k) account. Here’s what they found:

  • Average 401(k) balance of ages 25–34: $33,272 (average); $13,265 (median)
  • Average 401(k) balance of ages 35–44: $86,582 (average); $32,664 (median)

Knowing how other people stack up can help you figure out where you should be, but there aren’t any hard-and-fast rules about how much money you should have in your 401(k) account at every age. That’s because personal retirement goals will differ based on the type of lifestyle you want to have during retirement. So if your ideal retirement lifestyle is less costly than someone else’s, it’s okay to not have as much money invested as they do.

To figure out your ideal retirement lifestyle, you might consider factors like how often you’d like to travel, whether you’d like to stay in your current city or move to a lower cost of living area and what hobbies you’d like to take-up.

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How to start saving for retirement

Your 401(k) account is one of the best ways to start saving for retirement especially if you are contributing enough to receive the full match from your employer. For example, if your employer matches contributions of at least 4% of your salary, you’ll need to contribute at least 4% of each paycheck to your 401(k) in order to receive the match.

You can contribute up to $20,500 to your 401(k) account for 2022 (the contribution limit adjusts each year). For most people, it’s difficult to contribute enough of their paycheck to reach that $20,500 limit, so if you’re currently contributing up to your employer match amount, you’re already making solid progress.

But that doesn’t mean you can only save $20,500 a year for retirement. You can actually invest an additional $6,000 a year by opening up a traditional IRA or Roth IRA.

A Roth IRA is a powerful and highly-recommended tool you can use when it comes to saving for retirement since you can contribute after-tax money that gets invested, grows tax-free over time and can be withdrawn without paying taxes. The longer your time horizon, the more your money can grow.

There are lots of Roth IRA providers out there, like Fidelity and Charles Schwab.

Fidelity Investments

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum to open a Fidelity Go account, but minimum $10 balance for robo-advisor to start investing. Minimum $25,000 balance for Fidelity Personalized Planning & Advice

  • party

    Fees may vary depending on the investment vehicle selected. Zero commission fees for stock, ETF, options trades and some mutual funds; zero transaction fees for over 3,400 mutual funds; $0.65 per options contract. Fidelity Go is free for balances under $10,000 (after, $3 per month for balances between $10,000 and $49,999; 0.35% for balances over $50,000). Fidelity Personalized Planning & Advice has a 0.50% advisory fee

  • Bonus

  • Investment vehicles

    Robo advisor: Fidelity Go® and Fidelity Personalized Planning & Advice IRA: Fidelity Investments Traditional, Roth and Rollover IRAs Brokerage and trading: Fidelity Investments Trading Other: Fidelity Investments 529 College Savings; Fidelity HSA

  • Investment options

    Stocks, bonds, ETFs, mutual funds, CDs, options and fractional shares

  • Educational Resources

    Extensive tools and industry-leading, in-depth research from 20-plus independent providers

Charles Schwab

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One Brokerage Account. Automated investing through Schwab Intelligent Portfolios requires a $5,000 minimum deposit

  • party

    Fees may vary depending on the investment vehicle selected. Schwab One Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract

  • Bonus

  • Investment vehicles

    Robo advisor: Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account (PCRA) Brokerage and trading: Schwab One Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account

  • Investment options

    Stocks, bonds, mutual funds, CDs and ETFs

  • Educational Resources

    Extensive retirement planning tools

If you want a hands-off approach, look into one such as Betterment or Wealthfront, since they’re robo-advisors can pick the portfolio that’s right for you and automatically adjust your allocation based on your needs and risk tolerance.

betterment

On Betterment’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For Betterment Digital Investing, $0 minimum balance; Premium Investing requires a $100,000 minimum balance

  • party

    Fees may vary depending on the investment vehicle selected. For Betterment Digital Investing, 0.25% of your fund balance as an annual account fee; Premium Investing has a 0.40% annual fee

  • Bonus

    Up to one year of free management service with a qualifying deposit within 45 days of signup. Valid only for new individual investment accounts with Betterment LLC

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash

  • Educational Resources

    Betterment RetireGuide™ helps users plan for retirement

wealth front

On Wealthfront’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts

  • party

    Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance

  • Bonus

  • Investment vehicles

  • Investment options

    Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks

  • Educational Resources

    Offers free financial planning for college planning, retirement and homebuying

If you’re able to max out both your 401(k) account and your Roth IRA, that means you’re investing $26,500 per year for retirement — but there’s still yet another opportunity for you to save even more. You can also contribute to taxable brokerage accounts.

These accounts don’t have the same tax benefits that retirement accounts do (you’ll pay taxes any time you sell your assets and make a withdrawal). But taxable brokerage accounts can still be an important part of your retirement withdrawal strategy. Plus, there is no limit to how much you can invest through these accounts.

There are lots of brokerage account options out there but Select ranked Robinhood as the best app for active investing and Acorns as the best option for micro-investing. Acorns allows users to micro-invest using the Acorns’ Round-Ups® feature, which takes users’ spare change and puts it into ETFs. Users link their credit or debit card account to their Acorns account, and when purchases are made, the app will round up the costs to the nearest dollar and then invest that difference.

According to Acorns’ website, the average user invests more than $30 per month through the Round-Ups feature. And keep in mind that you’re investing money just by making purchases that you would make anyway.

Robinhood

On Robinhood’s secure site

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account or to start investing

  • party

    Fees may vary depending on the investment vehicle selected. Commission-free trading; regulatory transaction fees and trading activity fees may apply

  • Bonus

    Robinhood will add 1 share of free stock to your brokerage account when you link your bank account and fulfill the conditions in your promotion (you’ll be able to keep the stock or sell it after 2 trading days)

  • Investment vehicles

  • Investment options

    Stocks, ETFs, options trading, fractional shares, IPOs, plus certain cryptocurrencies through Robinhood Crypto (depending on where you live)

  • Educational Resources

acorns

  • Minimum deposit and balance

    Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No minimum required to open an account, $5 minimum to start investing

  • party

    Fees may vary depending on the investment vehicle selected. Monthly plans include: Personal ($3 per month) and Family ($5 per month)

  • Bonus

  • Investment vehicles

  • Investment options

    Diversified ETFs which include more than 7,000 stocks & bonds

  • Educational Resources

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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