The Average 401(k) Balance Among Retirees 65 and Older May Surprise You
- - The Average 401(k) Balance Among Retirees 65 and Older May Surprise You
Maurie Backman, The Motley FoolAugust 16, 2025 at 2:18 AM
Key Points -
It's important to save for retirement so you have enough income to be comfortable.
Many people struggle to set money aside for their senior years while they're working.
The sooner you begin building savings, the more options you might have once retirement rolls around.
The $23,760 Social Security bonus most retirees completely overlook ›
Working Americans are often told to try to set aside 15% to 20% of their income for retirement. And inevitably, many fail to do that.
That's understandable, though. It's by no means easy to part with up to one-fifth of your monthly paycheck when you have a host of bills to cover.
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And let's be realistic: We all have wants. Whether it's your daily morning latte from a coffee shop, takeout dinners a few nights a week, or a nice island vacation once or twice a year, it's not unreasonable to want to spend some of your hard-earned money on things that make you happy.
For this reason, many people struggle to save for retirement despite knowing how important it is. In fact, Vanguard recently compiled some information on average 401(k) plan balances by age. And you may find the results very surprising.
What the average older American has saved for retirement
Vanguard's most recent set of data shows that the average 401(k) balance among Americans ages 65 and older is $299,442. But that doesn't tell the whole story.
When we look at the median 401(k) balance among that same group, we can see that it's only $95,425. That's clearly a huge difference.
In case you fell asleep repeatedly during Statistics 101, you should know that when a median in a data set is considerably lower than the average, it indicates that the median is likely a more representative figure. In the case of these numbers, a small percentage of very strong savers likely skewed the average 401(k) balance upward, making the median a more typical number.
A person at a desk holding papers.
Image source: Getty Images.
But even the average 401(k) balance reported by Vanguard isn't so impressive. If we use the 4% rule to manage withdrawals from a nest egg worth roughly $300,000, it amounts to $12,000 of annual income, or $1,000 per month.
The average monthly Social Security benefit, meanwhile, is about $2,000 a month today. Adding $1,000 a month from savings turns a potentially unlivable wage into a livable one.
At the same time, $3,000 a month isn't a ton of money. So if you'd like to secure a larger retirement income for yourself, it's imperative to prioritize savings early on.
You can do better than the typical older American today
Clearly, the typical American 65 and over doesn't have a ton of retirement savings. But with the right strategy, you can do better.
You should know that the sooner you begin building your nest egg, the more successful you're likely to be. Case in point: If you begin saving $300 a month for retirement at age 25 and enjoy a yearly 8% return in your portfolio (which is a bit below the stock market's average), you could end up with almost $933,000 by age 65.
However, if you wait 10 years to begin saving that $300 a month, you're looking at more like $408,000 by age 65, assuming the same yearly return. And if you wait 20 years, you're looking at about $165,000, once again based on an 8% return each year.
The takeaway
Do what you can to prioritize retirement savings from a young age. Some strategies to boost your 401(k) include:
Contributing enough to claim your full employer match
Saving your raise (or a portion of it) each year
Following a budget that makes room for 401(k) contributions
Working a side job and using your earnings to fund your retirement savings
The typical American 65 and over may not have all that much money set aside for retirement. But with enough time and a solid effort, you can set yourself up to retire with a lot more.
The $23,760 Social Security bonus most retirees completely overlook
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