Save and Invest

How much money Americans have in their 401(k)s at every age

Rebekah Maynard | Twenty20

If your company offers a 401(k) plan, it can be an effective way to save for your future: You get tax benefits, the money is automatically taken from your paycheck before you have the chance to spend it and, often, companies offer a match, which is essentially free money.

Consistent contributions can even make you a millionaire. In fact, the number of Fidelity 401(k) accounts with a balance of $1 million or more recently hit 180,000. These 401(k) millionaires are, "in large part, everyday people that are just taking advantage of that 401(k)," Katie Taylor, vice president of thought leadership at Fidelity Investments, tells CNBC Make It. "You don't need to make a million to save a million."

The average 401(k) balance, across millions of Fidelity accounts, is $103,700.

Not surprisingly, the account balances vary by generation. To give you an idea of how your retirement savings stack up against your peers, check out the average 401(k) balances in Fidelity accounts, broken down by age, as of the first quarter of 2019.

The data was provided to CNBC Make It by Fidelity, the nation's largest retirement-plan provider.

Here are the average contribution rates by age, also from Fidelity. These rates do not include any matching contributions from employers.

How much should I be saving for retirement?

The answer to this is highly personal and depends on your lifestyle, expenses and spending habits, but there are a few basic guidelines to follow if you want to retire comfortably.

Some experts, including co-founder of AE Wealth Management David Bach, say that if you set aside at least 10% of your income, you'll be fine. More is always better: Bach says that if you want to retire "rich," save 15-20% and, if you want to retire early, save 20% or more.

Fidelity recommends saving 15%, and that amount includes contributions from your paycheck as well as any contributions from your company.

If you can't save 15% right away, "make sure that you're saving at least enough to get the full match that your employer offers," says Taylor. Then, "make a commitment to yourself that you're going to increase your contribution by 1-2% every year until you get there," she says, adding: "Getting started early at any amount is always a great idea."

The definitive guide to retirement savings plans
The definitive guide to retirement savings plans

Fidelity also recommends having 10 times your final salary in savings if you want to retire by age 67. And it suggests a timeline to use in order to get to that magic number:

  • By age 30: Have the equivalent of your starting salary saved
  • By age 35: Have two times your salary saved
  • By age 40: Have three times your salary saved
  • By age 45: Have four times your salary saved
  • By age 50: Have six times your salary saved
  • By age 55: Have seven times your salary saved
  • By age 60: Have eight times your salary saved
  • By age 67: Have 10 times your salary saved

Ultimately, everyone's scenario is different. To help you figure out the right amount to fund your retirement, try using a retirement calculator.

What if I don't have a 401(k)?

If you're one of the many Americans without access to a 401(k), don't stress. Most importantly, "don't let that be a deterrent for not saving for the future," says Taylor. "Whether or not you have access to a 401(k), at some point, you will want to retire and you will need to have money saved."

You have plenty of other options, including a traditional, Roth or SEP IRA; a health savings account (HSA) or a normal investment account.

Read up on all of your options, choose an account to fund and start setting aside money for your future today.

Don't miss: Here's how much money Americans think is enough to be 'financially comfortable'

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