Average 401(k) balance for Americans aged 45-54 is $168,646

Many Americans face challenges when it comes to saving for retirement. Inflation and high interest rates are making it difficult for workers to set aside money for their 401(k) plans. As a result, some people may stop contributing to their retirement savings. A recent report shows the average 401(k) balance for Americans aged 45 to 54 is $168,646. However, the median balance is much lower at $60,763, suggesting that many people have far less saved. This is concerning, especially for those closer to retirement, as time is running out to increase savings. Experts recommend that individuals should aim to replace about 70% to 80% of their pre-retirement income. The typical Social Security benefit is about $24,000 a year, so many will need additional savings to live comfortably. For someone needing $48,000 a year, they might require a 401(k) balance of $600,000 if using a 4% withdrawal rate. Those 50 and older can make extra contributions to their 401(k) to catch up. Changing jobs or taking on side work can also help increase contributions. It’s important for everyone to assess their own retirement savings needs, even if their 401(k) balance looks good compared to others. There is still time to make adjustments to ensure a more secure retirement.