According to the Alliance for Lifetime Income, 2024 will see a huge increase in Americans turning 65. In fact, about 11,200 Americans are turning 65 every day. This means that more people are nearing or entering retirement than ever before.
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Want to know how your retirement fund compares to your peers? In this day and age, knowing your financial situation is important.
To help, Humphrey Yang, a famous TikTok financial expert, explained the average 401(k) balances and how many people invested, by age group, in a video he posted last year. Here’s how much you should have saved for retirement by age group, according to Yang.
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If you’re young, the beginning of your career is an important time to lay the foundation for retirement savings.
Yang said the average 401(k) for 18- to 25-year-olds is $664,000, with the average being $1,786. It is important to start immediately, but he also advised to look beyond the average contribution of 7%.
Aim for at least 15 to 20 percent of your total income to ensure a respectable retirement.
If you’re moving into your late 20s to early 30s, the goal is to save money.
The average 401(k) group balance is $37,211. Contributions also rise slightly to 8%. Try to save 1.2 times your annual salary by 30. It can provide a solid foundation for future expansion.
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Middle-aged people find themselves wanting to save even more. If you are in your late 30s and early 40s, you should have at least 2.6 times your annual income saved for retirement.
With an average 401(k) balance of $97,020 and a median of $36,117, focusing on debt relief and understanding future income in retirement becomes important.
Some people in this age group are within ten years of retirement. If you are 45 to 54 years old, you should set a goal of saving 8.2 times your annual income by age 60.
Although the average 401(k) balance is $172,000, Yang stressed the importance of eliminating debt and carefully planning for retirement to have a healthy future.
These ages are about to end. If you are 55 to 64 years old and retirement is around the corner, you should aim to have 10 times your annual income saved so you don’t retire by age 65.