Average 401(k) Balance by Age (2024 Edition)
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- เผยแพร่เมื่อ 25 เม.ย. 2024
- Average 401(k) Balance by Age (2024 Edition)
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Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life.
Becoming a millionaire through a Roth IRA or a 401(k) involves different strategies for maximizing profits. A Roth IRA offers tax-free withdrawals in retirement, which can be advantageous if you expect to be in a higher tax bracket later in life. On the other hand, a 401(k) provides tax-deferred growth and potential employer contributions, boosting your savings. The optimal choice depends on factors like your current and future tax situation, employer match, and investment options. Consulting a financial advisor can help tailor a strategy that aligns with your financial goals and circumstances.
Prioritizing effective personal finance management holds greater significance than the sheer amount saved, irrespective of income source. Consulting a certified financial advisor can offer tailored strategies to optimize financial results by reducing expenses and enhancing income, regardless of whether it's earned through employment or investments.
I wholeheartedly concur. At 40+ years old and newly retired, my external retirement funds total around One million two hundred fifty thousand dollars.. With no debt and minimal retirement fund allocation relative to my portfolio's value over the last three years, I recognize the importance of a financial advisor. Neglecting them isn't an option; however, thorough research is vital to find a trustworthy fiduciary advisor.
This aligns perfectly with my desire to organize my finances prior to retirement. Could you provide me with access to your advisor?
My CFA, Annette Christine Conte , is a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
This is so relatable and true lol. I remembered how tough it was before I hit the $100k mark 37. I am 56 today with over $2.8 million in my retirement nest fund alone, didnt take me any stress to get there. Maybe its because my CFP is reliable, but point is, it was way easier from there.
I'm headed in the same direction, and it's not that difficult. Perhaps too complicated for beginners, but that's why it's best to consult an experienced market strategist.
Agreed. I deal with an investment advisor for this reason. I currently have over $800k invested in a diversified portfolio that has grown exponentially and is suitable for all market seasons. Our current project for this year is a more concrete ballpark target.
She goes by ‘Melissa Jean Taligdan’. I choose to delegate my excesses to her because of her great expertise. I suggest you look her up. To be honest, almost didn't buy the idea of letting someone handle growing my finances, but so glad I did!!!
Its reassuring hearing that. I've been playing catch up on my 401k this year. Trying to max out this year and get my account up to 85K by end of the year, age 36. Even with a near 30% combined contribution w/employer match it still feels like a crawl to 100K
This gives me hope, I'm at 145k at 36 but still feel behind. I want to retire ASAP. I truly hate being a wage slave.
Money Guys: "Comparison is the thief of joy."
Also Money Guys: "Let's compare 401k balances." 😅😅😅
So true 😂
Only comparison that’s okay and should be encouraging!
Ah yes, 401k comparison. The third best thing to compare after a dick size comparison and a salary/compensation comparison.
Context is key. Comparing yourself to 401K balances by age is much more useful and transparent than comparing cars, homes, luxury vacations or other things that don’t tell one how secure one actually is financially.
You need to be able to compare to grasp if you r behind or not to be able to rap your head around it and do better instead of staying behind because you think you are doing well.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@@MaverickDylan-7 My advisor is Victoria Carmen Santaella
You can look her up online
@@richardmartins2574 You can look her up online
My primary concern is how to grow my reserve of $300k which has been sitting duck since forever with zero to no gains, sure I know the risks of short term gains are much greater but if well managed one'd make a killing, am I wrong?
These strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
Laila artine kassardjian' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
Recently retired and unsure if my 401(k) and IRA will provide a stable future. i need an approach that will align with my risk tolerance and financial goals, i set aside $1m to achieve this. Do you suggest i get into stocks or buy a rental property?
Look up dividend aristocrats. Pick six to ten from that list. Those companies have a track record of 25+ years of paying dividends. Also, its advisable you work with a financial advisor to help set up a well-structured portfolio.
Exactly, I used to doubt the value of a financial advisor until my wife's company assigned her an investment adviser in 2020. Honestly, it’s been the best financial decision I’ve made. It helped tremendously; I went from barely making any profit to having a well-diversified portfolio that has grown significantly, with gains exceeding $850k.
I’ve been worried sick about the current state of my portfolio, who is your advisor?
Sharon Lee Peoples is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
I searched her up, and I have sent her an email. I hope she gets back to me soon. Thank you
*I didn't become financially independent until I was in my late 40's, and I'm still in my 40's. In addition to having purchased my second home and earning money on a monthly basis through passive income, I've also achieved three out of five goals. I just hope this inspires someone to realize that it doesn't matter if you don't have any of these things yet, you can start today no matter your age. Change your future by investing! I made a rather big decision by investing in the financial market.*
Investing in many sources of income that are independent on government paychecks is the prudent thing that everyone should be thinking about right now, especially given the global economic crisis. Stocks, forex, and digital currencies are still good investments at this time.
Sure, investing is essential for maintaining your financial stability, but making any kind of legitimate investment without the correct advice of a professional can result in a significant loss as well.
It's never easy in the financial market!
I made a lots of errors trying to do it myself
Yeah I have same issue also, sometimes I feel like the market is being manupulated
I am 23yrs old and have $17.5k in a 401a, $6.5k in RothIRA, and $4.7k in a 457b. I am a City Bus Operator in Tampa, Fl making $22.65/hr. Doesnt take a high income to win, just good habits and determination. Im debt free and hoping to surpass $100k net worth by 24 currently at 88k net worth.
I hope the vast bulk of your portfolio is in an index that follows the S&P500.
@@glasshalffull2930yes. It is completely in index funds that follow the general US market. My return on my 401a for 2023 was 24%.
I have been retired for 6 years. I have a 130K annuity, plus a 401k depleted to $350,000 of money that I’m considering allocating in a 60/40 stocks and bond ratio. i'm hoping this is a valid thought process?
Wasn't a great April, but if you step back and actually look you will see the S&P 500 was up for the first Quarter. In the last 30 days, my IRA saw a gain of $40k. You might consider financial advisory if you're experiencing significant drop.
51 YO, 1.8M 401K, 1.4M Taxable brokerage acct, 400K Roth Ira, house paid off. Hope to retire in the next few years.
Wow …🎉
Why not now…? The models will work out at the most conservative draw rate and life expectancy for you guaranteed. Unless you’re grossly negligent with your expenses in retirement
Is there anything Bo isn't excited about?
Debt?
Taking money out of your 401k lol
😂🤣😂
He uses a different scale. If he's only "excited" about something and not "super excited", that's a big red flag and the video might be a dud.
Bo is the man!
34 with 250k for retirement (income is 115k) started at 25 and didn’t hit 6 figures (income) until 30
What is your savings rate?
I have about $200k at 34 age, but my income is only 82k and that is only recently, most of my income has been more like 60k doing 30-50% savings rate.
Good job. I'm 50 now with about 250K in retirement plus a vested govt pension. At 35 I only had 30k in retirement plus over 20k in student loan debt. I only started making over 100k about 4 years ago, but luckily, I've been able to increase to 140k, likely to increase 3% to 5% per year. I'm now debt free and I max out my contributions so I'm confident I'll be comfortable to retire between 65 and 70.
sounds good until you tell us which overpriced metro area you live in.
👏🏽
I think age bands have to be reconsidered. There is a huge difference compounding when you are banding ten years at a time. Would be interested in data within 5 year bands, or years in the work force. Something more meaningful than 30-39, 40-49 etc
58 years old with $900k in 401k, $200k traditional IRA, $50k Roth IRA, $60k HSA, $150k cash bal employee pension. 9 years to go until retirement.
Not sure your expenses, but couldn't you retire now?
@@FriskyDingo1983could be a health insurance consideration to stay in the workforce
That 60k in the HSA huge! I hear health is wealth, and it looks like you are the example!
Pay out of pocket for medical and elect employer provider accident and hospital insurance as a backup.
@@AaBbCcDdEeFuntil 59 1/2 then no penalty
Im 22 with 400 into my 401K and 15k into my roth IRA. Thanks money guy started investing at 19!
That's insane to me for a 22 yr old...nice work🎉
Amazing great job will give you so many options later on!
@@OBaegloich3that $400.00
Great job!!
Considering that's an average ROI of over 80% a year, I do believe this individual is trolling
I was not an investment person and didn't know a lot about my 401k. I just took the standard advice of maximizing your 401k match when I first started working. To my surprise, I hit that million 6 years ago when I was 48.
Outstanding recommendation for contributing at least enough to get that match!!! You should be well on your way to hitting your 2nd million.
I love that Bo is always excited about the daily topic! 😂
I love how you update this every year with new bits of information! I didn't know about the Rule of 55, and for myself who wants to retire at 55 (and currently on my way to hit that), glad to know I have more options once that stage of my life begins~
As a soon-to-be retiree, keeping my 401k on track after a bumpy 2022 is a high goal. I've read about investors generating up to $250k ROI in this present sinking market; any suggestions for increasing my ROI before retirement would be greatly appreciated.
Yes, you are right. it's been a brisk tailwind for investors in US stocks over the decades but it is still a delicate season now, so I advise you to consider the guidance of a financial advisor.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one.
Well, there are a few out there who know what they are doing. I tried a few in the past years, but I’ve been with 'MICHELE KATHERINE SINGH' for the last five years or so, and her returns have been pretty much amazing.
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
I am in my mid 30s and have around 60k in my 401k. I feel like I am doing okay... But the internet always makes me feel like I am behind.
You are doing WAY BETTER than most Americans. It's normal to feel that way ONLY if you let yourself feel like that by comparing yourself to others who are doing better than you. There will always be someone doing better than you, it's inevitable, but what matters is the progress and growth YOU are working on for yourself. KEEP IT UP YOUR FUTURE IS LOOKING BRIGHT MAN!
Working on my own portfolio and savings and it's nowhere near where everyone else is on the internet, but it leaves me peace of mind knowing I'm doing so much better than others who are living pay check to pay check and that I am NOT going to be struggling in the future with the financial cushion I am preparing for myself now.
@@dayulPHHard to say if that's good or not. It depends on your income.
I work for an extremely large recordkeeper and have seen thousands of participant balances. You're doing well. Keep it up! You're only ever in competition with your past self!
@@Rew123 Yeah I agree, income plays a big role. However, regardless of income, saving and investing your money for your future is still a way better option that letting it sit regardless of how much you make.
Also it's inevitable if you really want the success you envision, I am certain as humans we will find a way to get that growth even if it means lighting a fire under out butts.
@@dayulPH I meant was that if he makes $500,000 a year, $60K is pathetic
I am 32 years old and have $35k in my Roth 401k and $3k in a Roth IRA i just started. I barely got into saving at age 24. Seeing all the homeless around scares and motivates me to save as much as possible.
Wuddup my fellow 32 y/o brethrun. Kinda funny how close we are. I am at 33K 401K and 8K in my Roth. Better late than never. Good luck to you, my friend!
Don't worry too much about it man. The 30yo goal is largely asperational. If you have anything at 32, then you are doing great! I didn't start until 32, and barely missed the 2x mark by 40. And that is with a pandemic and some major health setbacks in the last decade. A lot happens in your 30s, and as long as you keep focused then you are going to be fine. At 35 I had $10k saved for retirement, and at age 40 it was close to $150k. I plan to be waaaay ahead by age 50 so that compounding interest can take me the rest of the way to goal and I can cut loose and chill out a bit the decade before actual retirement sets in.
But saving and sacrificing more now will open a lot of doors and options later in life. You are on a good track, so keep it up!
The homeless and average debt balances makes me motivated to max out that Roth.
One thing to consider is having your money in the roths makes it worth 30-50% more depending on your tax liability.
@@cookieforawookiei am 33 with $115k in roth 401k and like $2k in roth ira
These guys continue to deliver so much value. Really appreciate this show
I am 61 1/2, single, no kids and NO debt, currently with $975,000 in retirement savings in 403B and Roth IRA.
My 401(k) is awesome. 5% matched at 100%, and an additional 3% non-elective my employer contributes. I max that sucker out, and my HSA, and my childcare FSA. There is basically no paycheck left lol
Bravo, Bra-f’n-vo. I’m clapping my hands too.
That's where it's at. Well done. Some plans allow you to also contribute post tax money to 401k; my company allows up to 10%.
@@WRBWRXWGN Yeah I do the ROTH 401k, all $23000 of it. My tax bill sucks 😂
@@Joenzinator My employer just started offering a Roth 401k 2 years ago. I'm slowly working to move over everything to it because I was maxing out the traditional already. But MAN, it's hard to do with the tax impacts, haha Great job!
Cool. My employer matches 10% dollar for dollar.
Im 22 and are about to have 14,000 between my Ira and 401k
That ain’t shit
@@samuelmonreal9035 maybe not for you but I live a minimalist lifestyle and am saving for a house down payment while also investing in a business
Thats really good at that age. Compounding interest will surprise you when you hit your 30s! I reached 10k into my 401k when I was 30 years old and I was super ecstatic about this at the time.
@@samuelmonreal9035clearly someone doesn't understand compounding
Good stuff
One thing I don't think gets talked about enough when comparing pre tax and Roth contributions is the pre tax is taking that money off the top of your income, so it would be taxed at your current bracket. When you withdraw it and it becomes taxable and the same rules apply where the first 11k is taxed at 10%, then 12% etc. This means comparing present to future tax brackets doesn't tell the whole story, you want to compare your current tax bracket to your future effective tax rate (or even just your current effective rate to get an idea of what that difference is).
Exactly this
Also what never get talked about with Roth is the growth is pulled out tax free. You only pay taxes on the principal you put in. After 30 years of gains when you pull it out it's all tax free.
With traditional you may have a higher starting principle but then you have to pay taxes on that principle AND 30 years of gains when you want to pull it out.
@CarlosDiaz-je1bg I feel like that does get talked about, or at least more then what I mentioned. It was the argument that had me going hard into my Roth 401k for awhile. However, this is what brought me back to traditional: what are you doing with those tax deductions? If you're already maxing out your 401k and ira with room to spare then yeah go roth no Brainer, but if you're still doing a budget and trying to increase your savings consider that saving 10% of your income in Roth nets you the same as 12% of your paycheck in traditional if you're in the 22 or 24% tax bracket (I'm rounding obviously) so while all that growth being tax free seems really tempting it's probably not going as far as increasing the seeds for that growth by 20%.
I'm not anti Roth and I do still make some Roth savings contributions as they will give me some flexibility to play the tax bracket game in retirement but I think most people looking to increase their savings rate at better off minimizing their current tax bill to do so
Investing in a traditional 401k is planning on being poorer in retirement, any way you look at it.
@@Re3iRtH ok troll
Great content here. 25 years old. I have a better than average 401k balance, but I wasn't contributing as much as I could have beyond the employer match. This motivated me to bump up my contributions more, even if it requires some small sacrifices for the next few years. Now with my employer match and my contributions and other savings, I'm at about 20% gross savings. Hoping to get to that 25% level soon, but have some other expenses right now that prevent me from doing that. But motivated to try to get to that level as soon as I can!
Thanks for covering the rule of 55. I plan on using this for my 401k pre-tax and match (also pre-tax) and the Roth 401k monies above that when I retire. I wish someone would do a more in-depth conversation about this. I'm 41 and want to be prepared and informed at 55 to make sure it is right that I take advantage of this.
Same, I'm team shoot for 55 but be guaranteed by 65. I didn't know it applied to Ira accounts but it sounded like it does they way it was explained this time.
I'm 50 now, debt free with about 250K in retirement plus a vested govt pension. At 35, I only had 30k in retirement plus over 20k in student loan debt. I finished my bachelors degree at age 40 and was making 46k to 50k. I only started making over 100k about 4 years ago, but luckily, I've been able to increase to 140k, likely to increase 3% to 5% per year. I'm now debt free and I max out my contributions so I'm confident I'll be comfortable to retire between 65 and 70. Even if you are a "Late Bloomer" like me, it is possible to catch up and have a comfortable retirement.
Currently going onto 23 years old, I have started wanting to do as much as i can with the advantage of time i have. Currently I back paid my Roth IRA for 2023 and set up max contributions on auto pay going forward. I am unsure of where to go next when it comes to saving for a home in the next 10 to 15 years.
I have a fully funded emergency fund and one debt in the form of a car loan. My work doest offer any 401k (they are THINKING of doing a 3% match Roth).
I appreciate learning of the existence of all these different tools, but i get lost at how to approach and apply these to my financial arsenal.
Keep up the good work ❤
Congrats! How about a brokerage account?
Precious metals are a good way to save up for a big purchase. Keeps you from going out and spending like it's in a bank account, but when have enough metals you can offload it easy at a bullion dealer or coin shop.
I think bullion is horrible advice. There are substantial fees when you buy. There are substantial fees when you sell. Historically precious metals keep up with inflation but are not gaining significant value above inflation like the stock market. And last but not least gain in precious metals is taxed at capital gains rate of 28 percent, which is almost double the most common capital gains tax rate for other investments.
@@netbenefits4595 You don't understand PMs at all. Capital gains sales tax lol😆
@netbenefits4595 you obviously don't have a clue about PMs. Capital gains tax lol 😆
Keep in mind a couple things.
1) this is only a person's 401k. I don't think that even the money guy show is suggesting a 25% savings rate all dedicated in a person's 401k. That 25% is going to be across your 401k, Roth, HSA, savings, and brokerage accounts. If you are saving 14% in your 401k, then you are likely not saving enough in your other account types.
2) this is the average account balance, not the average holdings of an individual. I mean, if the average contribution rate was 14%, and the average income of a working individual is $60-80k, then that doesn't add up at all. The average person changes jobs, swaps holdings institutions, or tries to not get too far out of scope with fdic insurance. By the time you retire I imagine the typical person has 2-3 different 401k accounts out in the wild. So if each of those are in the $150-200k level then they are doing pretty great.
3) do we know if this is the average mean? Or median? Because if these balances are one of those then the number is going to be skewed extremely high, and the other will be skewed extremely low. 😅
I would love to see these numbers with the top and bottom 10% removed, because I imagine a few whales out there are displacing the tub a lot more than the typical minnow.
4) keep in mind that most employers didn't even start offering a 401k until the mid-90s. So anyone over the age of 50 should have about the same balance, because they all started around the same time. Those closer to 65 are still more likely to have some kind of pension, while those closer to 50 never had a pension option, but have more time to grow their 401k.
On top of that, most people in the 50+ club are likely going to get full SSA benefits, while those of us who are younger are likely to see more limited inflation matches, higher taxes, or some other form of cost savings applied. I think that the good news though is that if you log in, regardless of age, the projected numbers are likely to be real, just don't expect those numbers to grow over time with income and cola. 😅
Agree. I don’t have a 401k. But, i have a 401a, Roth 403b, 457b, Roth IRA, and a brokerage account.
Great video, as always, you two! Sharing this with a friend who's about to switch employers.
Curious if these numbers are only for a 401k. If I have less in my 401k then these numbers noted in the video but I make up for them with other accounts (ira, brokerage, etc) would that be considered "on track"
I’m 28, 401k is at $75k - Roth at $23k - and a VUL policy at around $10k. My biggest struggle has been maxing my Roth contributions year to year.
What’s your occupation and girl preference
You're right at the point where things are going to really take off. Keep the momentum. After 100k the snowball really happens.
At the beginning it's fun to watch your balance more than double as you match or best your own contributions, so the balance flies! Then you get a few years where it's like blowing air into the void because your balance may decrease the same amount as you contribute in a year. But if you stick with it a little longer, then you will normally see your compounding increase your balance more than your contribution. I'm just starting to hit that stage now, and it's kinda bonkers to watch.
Many of my friends went to Tech! Family were part of the Luters that owned Smithfield hams, but my side were peanut farmers in Zuni, VA. You are doing fantastic! What I did was every time I got a raise, I would up my contributions by 1%. That way I still got some of the raise in my wallet and so it wasn’t too bad. My contributions were automatically deducted.
@@glasshalffull2930 oh congratulations 🎊 we got a 6 grader coming bragging about his big group of friends 🤣🤣🤣
I’m in my 40s and have been really pushing for saving/investing for the last 8 years… I’m playing catch up now, but I wish I had started at a younger age, but unfortunately, I didn’t know much about investing when I was younger. Now I’m trying to tell anyone who will listen to save and invest for your future as early as you can!
My father didn’t believe in stocks as he lived through the Great Depression. So I didn’t invest in stocks til I was 30. Thankfully a coworker educated me and I went 100% in the S&P500. Now at 64 I have $3.3 million. Still fully in the S&P500.
Thank you, great info
Loved this. You got a new subscriber
I'm maxing out my 401k into Roth contributions and my wife is maxing into traditional (no roth avail). We are also maxing out two Roth IRA's when we can contribute + maxing out a HSA. This puts us just over 25% savings rate not counting generous employer contributions. It is costing us $6095 (26.5%) in taxes each year (state+federal) to contribute 23k into Roth 401k vs. traditional. Would you switch my 401k contribution to traditional for the 6k tax savings and invest the savings into a brokerage account?
Don't listen to random people in comment section, (myself included). Do your own research and educate yourself.
Bad advice, everyone should listen to me. I’m quite intelligent and very modest.
@@OShackHennessy😂😅
I will not listen. I am not going to do any research. Take that!
If we don't listen to you that means we should listen to the comments
Listen, verify, learn and do better than your parents😉
It’ll never be enough. No one can predict the future and the value of the dollar. Do what you can with what you got and good luck to everyone
Every time they say time is still on your side, Time is on My Side starts by the rolling stones starts playing in my head
Bo is always excited
Man now I need to go back and rewatch Better Luck Tomorrow, it's been so long
I'm doing pretty well in this regard. I'm 41 with about $380k in my 401k. I'm fortunate in that my employer offers an excellent match; 6% for 150%
I’m 42 with $343K, just $37K behind you!
Good info! I’d be interested to see what the median numbers look like as well since taking just an average can skew pretty heavily
Median number is scary low! 🤑
That intro, Brian 🤣🤣
best intro to date! lol
Married my husband at 21 so many years ago. Was lucky enough at that age to have access to a 401k. While Louise in hr pushed me at 19 to contribute had no interest. My husband made sure I signed up. We are now entering financial abundance. Our career’s in engineering certainly didn’t hurt, but saving early and often certainly helped!
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
Using a 401(k) or IRA is a valuable strategy for retirement planning, providing potential savings growth and tax advantages. While the stock market is promising, expert guidance is essential for effective portfolio management
Opting for an inves-tment advisr is currently the optimal approach for navigating the stock market, particularly for those nearing retirement. I've been consulting with a coach for a while, and my portfolio has surged by 85% since 2022
I've been looking to get one, but have been kind of relaxed about it. Could you recommend your advis0r? I'll be happy to use some help.
’Sharon Marissa Wolfe’ is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I looked up her name online and found her page. I emailed and made an appointment to talk with her. Thanks for the tip.
I’m 28, I have 200k in Roth IRA with no debt. I didn’t realize how good that was.
Just want to make sure. Are these averages, or are they medians? Just seemed low for average. Thanks! Also having more than my current income is tough since I make way more than I did when I was younger. I do think I'll reach those numbers though. Thanks for the video!
Can you do a video on ESOP companies and how I can plan on my employment stock program
I agree would love to see one.
Maybe a small critique, but is there a way to break down the 20s decade to 20, 25 and 29 year old? Theres typically a LOT of volatility in job market, income and debt reduction during that time period.
Question I've had on these datasets: Does it take into account that people may have more than one 401k account? For example, when you move from one employer to another? Would be super interesting to see what average and mean total retirement account values are but I'm sure it's not an easy task.
does this savings rate of 12-13% for 30 years old include high interest debt or only step 2,5 and 6 in the FOO? I know the 25% that the money guys suggest is step 2-7 but I am not sure what the averages you are saying are? As I am following the plan my student loan is considered a high interest debt at 5.75 % so in step 3 I am just paying on that. For step 2 my employer match is only .50 cents on the dollar up to 6%. so even if I inlcude their match I won't be able to put anything more towards the stock market until I am 34 and my student loan is paid off. It makes me feel like I won't get to the 25% towards the stock market like I would like.
Get your employer match, and then put every extra dollar into this student loan debt until it's gone. Then you can focus on investing.
Favorite show every year
Do these balances take into account of raises or changes of income? Should we project normal rates of return to figure out if we need to contribute more to reach that number?
You up your contributions as you get raises til you max out. ($23K 401K and $6K Roth) But don’t freak out and just contribute what you can. Just make sure you have it all in the S&P500. That is the gold standard long term way to being a millionaire.
Are these Numbers for an individual or for a household?
If you went from a relatively low/modest salary in your 20's and early 30's and then your income doubles in just a couple years, how does that affect how much of your salary you should have saved? For examples the 30's says by the end have 2.6x your annual salary. I'll be short of that, is that expected if your salary jumps? Or does it take into account wage increases?
Since watching (years back now) I’ve been able to get my 401k/457 to a combined 25%. So on top of that 25% savings rate, I’m also maxing IRA. My savings rate at this point I have no idea what it is, but it’s got to be beyond 40% thanks to you guys!
Yeah, I'm doing 10% in my 401k, which is about 20% after employer match and profit share.
But then maxing out my HSA, and my and my wife's roths, and that puts us well above 40%. If I max out those 3 accounts and get my full employer match then I'm going to over save for retirement. But I'd rather have options in the future than not. Better to be ahead with the option to slow down or take a life detour, than be right on the rickity edge and then get derailed.
How do the contribution limits work for salary vs special contributions. In my plan I contribute every paycheck like normal and also can do up to 50% of my annual bonus. Can I only do up to that limit from both sources, or is the annual limit apply to salary only?
I made the mistake one year of meeting the maximum contribution my first paycheck in December. The 457b/401k maximum contribution limit is based off the contribution of the employee and the employer match. I lost out of my employers match during my last paycheck in December because I had already met the limit the previous check. Not sure if that was your question though.
I'm feeling really good where I am at 40. I'm at $450k in my 401k. Winning ✊🏼
I thought I was the only crazy saver but glad to see there are others that are taking advantage of compounding interest and starting early too!
Nice Job!! When I got to that amount I cut back on my 401K contributions and starting buying rental properties with the money I was putting into my 401K. I retired 11 years ago at 50 with a summer condo on Maui (Napili Beach) and a winter townhome in Tahoe for ski season, and two rental properties. Everything is paid off and I've yet to take any money out of my 401K which grew a lot over a ten year period without barely putting anymore money into it. Good Luck, you're doing great.
@@bjbhehir Damn sounds like a dream life😂 im 24 and just passed 100k in investments and trying to retire like you
@@genzlegacy7988i definitely left a lot of money on the table retiring at 50 but you only need so much to live comfortably! Luckily, I've been able to stay really active! Yesterday was day 111 for this ski season!
Dream big dreams and put on your overalls!
You have chosen to keep working until you are old or dead by investing in a 401k. That makes you feel good?
Your 401k pays you $0 in cash flow that could replace your day job income.
“I’m a man! I’m 40!” - Coach Mike Gundy
I’ve got 6 times my income saved in retirement accounts!
Question. Are we counting 401k/403b and Roth IRA in the "at 30 one should have 1.2x"? Because if we do then I could come close. If not then I have some serious work to do!
this was a great video
Why are the numbers so different than what’s shown on your website? For example, your site says $21,529 is the average balance for people in their 20s, which is quite different than $13,124. Are the numbers changing that drastically year over year?
Do we add our local taxes (I live in a major city that has its own income tax) to the total marginal tax rate?
I am in my 20s and trying to use these recommendations as a checklist of where I should be each decade. Are these multiples based on current salaries only? Or would I need to account for inflation over time to have the equivalent of today's salary in the future?
28 and married, my wife and I have 50k in our Roths and 100k in traditional. We haven’t had an employer with a match for a few years at this point
Thanks!
Loved the dollar cost average of a 6 year flat market. I have not see that illustrated better anywhere. Thumbs up.
I work at a tribal organization with 2 different matches. The company matches 3% that is immediately vested and the tribe matches 2.5% with a 5 year vesting. It's a little strange, but they're pretty generous.
After 27 years the matching alone is over 500K. Best vehicle I have found to save and grow wealth. If it wasn't for the automatic contributions every check I never would have saved this much sending a check to another account on a regular basis. 55 next spring and the end of work is in sight.
29.
175K in my 401K.
5k in my Roth IRA
~100k salary for now. Been saving since I was 21.
Going places. You’ll be set man!
Must be nice being a white suburban college boy with mommy and daddy
@@DoubleJabSlipRightHand it is nice. No shame in it tho
@@DoubleJabSlipRightHand I live up a holler in Appalachia, off several unpaved roads in a community that didn't get electric until 1960, 15 miles outside of a town of 150 people.
I run a farm that grosses 50k annually, I also work on the side as a software engineer, and I'm a Volunteer Fire Captain in a district that ranges from 5 people per square mile to 30 per square mile that is so far out there that the majority of our medical calls turn into me commanding a Landing Zone in a hay field for a medical helicopter to land because it's a 2hr to 3hr drive to a hospital.
But, clearly you know better and it's suburban LOL
Another factor with Roth 401k contributions is people like me. I’m maxing out both my Roth IRA and my 401k. So in order to contribute more money to my retirement plans I switched from a traditional 401k to a Roth 401k. That way I’m paying taxes today, which is effectively putting more money into my retirement account and when I withdraw that money from my Roth 401k in the future it will not be taxed, so the money will go farther in retirement than it would go if I had to pay some of that money to the IRS in taxes.
Our 401K plan sucks. I spoke with the financial representative I asked if there were lower expense options and was told that their plans are already low and I won't find anything lower. (the fees are 1.2%) Then I asked if I was to leave what would be the process in moving my 401K. I was told it's beneficial to keep it at their financial institution because, again, they have low fees. I felt stupid at the end so I just picked a target date fund and called it a day. -.- We are a TINY company - 5 people total - so we don't have an HR to speak with. oh well.
If you leave and move to a larger employer you will find much lower fees if you move it. I work for a very large company at the fee on my large co index is 0.007%, yes that is 0.7% of 1%. That's obviously an extreme example but there's plenty of middle ground they're
HR never understands investment options any better than you will anyway. They punt back to the investment company's 800 number.
Hey moneyguys family, I'm 37 years old.. Are these numbers for roth or traditional..?
I always wonder, are these numbers per person or per couple? Thanks!
30 and starting at 0.
Don’t be too caught up on what everyone is doing and just begin today.
Got a new job and maxing it out that way I can get the most from my employer match
worst mistake with my 401k... a colleague and i are aggressive savers. he finishes his max 401k contribution by Feb or March. I usually finish mine around June and later August(after age 50). we have a 3% match which we never completely received and i thought this was from being a " highly compensated employee". IT TURNS OUT, our employer stopped contributing our match once we are done for the year and their 3% match per paycheck was prorated for 26 pay periods. we discovered this in year 10. so i must have lost out on about 30K over the 9-10yrs. i don't think the increased "time in the market" made up for that. the year we found out we adjusted our contributions to last the whole year and the year after that they dissolved our department by May so I maxed out the 401K by then. so only 1 full match in 11 yrs.
That... That hurts man. I nearly did that to myself, but I'm friends with the finance lady at work, so when she saw me increase my percentage a lot she called and asked me for context and set me right. I don't think most people realize that it is a percentage of pay period that you contribute, and just assume it averages over the year. But it's not.
I almost made the same mistake, but I found out real early.
@@glasshalffull2930 i was so angry about it. if i wasn't maxing out my 401k but just distributed it through the 26 pay periods i would have gotten my full 3% match. up to now i don't see the logic in it.
Great point. I guess depending on the market, some years you did very well getting maxed out early
Aren’t most companies now correcting that?
Like if you did allot of OT they will match regardless if you hit the max contribution limit or not
Is How much I should save based on different income levels thoughout my life and is it if I only dave that amount in that age bracket or all age brackets.
I saved 50% income in my 20s, but only 30% in my 30s, does the 20s number still count?
It depends what you are asking about. Money Guy have "rule" that you should try to save 25% of gross income (because apparently if you start at 35 with low saving, it's how much you need to get 100% of your pre retired income after you retire). On their site you can check rescources (wealth multiplier calculator) to see how much easier you have now with accumulated savings to achieve 1M $ and 2M $ of "nest egg" at 65
It sounds like you're crushing it, but be careful. The savings rate does two things: it increases your nest egg while keeping your spending requirements low. If your savings rate goes down, your needs in retirement are actually going up.
Wife and I are 30y/o. $350K in 401ks, $170k in Individual Brokerage accounts, $83k in Roth IRAs. Basically have only lived off of one of our incomes since graduating college and saved the rest.
Nice work!
Thank you
Is there a way to legally opt out of CalSTRS? Californias educator pension plan
turning 50 this year, so I can take advantage of adding more to 401k this year? 401k is about 200k, spouse n I have about 600k in cd's/stocks and high y savings, fully funded emergency fund, husband is already retired on a military pension and disability, and I do have a small employee pension as well. I am retiring from my current job at age 55 and we are moving from our home in the states, to France, so I can aforrd to fully retire at an age I can enjoy all the travel I want to do. I feel like this next 5 years as I go towards 55, is very important for our families wealth health, is there a bucket I am overlooking or should max out now?
If you are turning 50 this year, you can contribute an additional $7,500 to your existing limit.
@@gobot4455 thank you!
Is this strictly for 401k (I know, dumb question), or does it include your own investments as well? For me, I'm mid 30 and I'm just right under 60k in my 401k, but I also invest around 25% of my take home pay monthly with stock brokerage, like M1, Fidelity etc.
Just keep in mind that once your brokerage account qualifies, the capital gains tax is applied, not ordinary income.
Great show, thank you! There is really a lot of great information here. Quick question, when I look at my numbers can I also include my and my spouse's IRAs? I assume when Vanguard and Fidelity got their statistics, they just looked at the 401ks open on their books, but we do have quite a significant amount that was rolled over to an IRA after a job change. I feel like job changes can drive the average person's 401k balances down, especially if you prefer to rollover into an IRA rather than your new company's 401k.
For sure, and when they mention the savings rates in this episode, it doesn't count IRA/HSA/brokerage contributions towards 25%. You could use their modified Millionaire Next Door target net worth formula: (Age x Income) / (10 + yearsUntil40). Could do it individually and/or average age with your spouse and total house income.
Dqydj has some interesting statistics on both a normal and “expansive” definition of retirement savings, with the “expansive” including several other investment vehicles.
On the spouse question, yes. You are a household, and when you retire, then all funds will work towards that retirement. Conversely, if you aren't together then your spouse will be taking half of your combined retirement.
For the statistics, also yes. They are anonomised statistics, so they are just account balances. Over your career if you and your spouse both work, then you are likely going to accumulate 5-10 different retirement accounts at different institutions. As you approach fdic limits for different account types, you will want to diversify where your money is held, which is why the average account balance is so low in spite of the quoted 12-14% savings rate. The numbers don't add up because of all the abandoned small accounts that are forgotten out there, plus all of the purposeful split account balances out there.
Does this include 401ks rolled over to IRAs? If not, this is only showing current employer 401ks.
So how skewed are these numbers? a few might have 7 figures, and some might have multiple different accts from former employers that they did not move. is this from just Vanguard investors? i do like this info though. Gives me idea of where i am.
I only have 37k in my roth 401, but i have around 260k in a personal diversified etf acct... Is there value any value in putting more in the roth 401k vs the personal acct given they're both post tax?
Personal account? as in a brokerage account you have to pay capital gains taxes on once you sell the ETF?
What do you define as 401k? Does that include 457 plan, Roth IRA, brokerages? I dont have a 401-k.
Thanks for the video, guys! Can you tell me if it is better to fully fund IRA and 401k at the beginning of each year or throughout the year (maybe catch some dips?).
I wouldn’t try to overthink it to that degree. Steady contributions will dollar cost average themselves over time, and won’t stress your budget if making large lump sums happen to coincide with unexpected expenses.
Although there may be some exception, maxing out early would not be a good idea.
Here’s why. Most employers base the match off your paycheck, not your contribution amount.
Example. Say your employer has a 100% match up to 5% and your paycheck is $5,000. You contribute $250 (5%) and your employer contributes $250 (5%). You decide you want to max out your 401(k) early so you decide to go to 100%. So you deposit the full $5,000, your employer is still only going to put in the 5%. ($250).
I'm curious the results of the 2007-2012 example for someone who had been investing longer. For example, the person had $400,000 at the beginning of that same chart, investing the same $500 per month over the same time period. How does the larger monetary loss in the first 1/4 of the chart affect the annualized returns compared to the person just starting out.
The studio looks great money guy
Would it be better to start investing in an S&P 500 style index fund if starting at an early age, whereas a more late/mid range age might want to focus on a target date fund when starting? Of course, assuming they haven't reached critical mass and hire an investment pro.
If so, would you have an age where making the different choice makes the most sense? Ie, at 20 S&P, at 35 target fund...? Again, based on when you start.
Target date funds invest primarily in the S&P500 while you are young. It starts more aggressive to help build a portfolio and then as you get older it becomes less risky and invests more of the money into bonds and safer strategies.
SUMMARY: It is never a bad time to put money toward a target date fund but I would argue it could be not ideal to invest in the s&p500 if you are close to retirement.
I have yet to see a compelling reason why somebody multiple decades away from retirement should have ANY bonds.
I think they're doing a bit of asset location gatekeeping and nuance trolling to justify their existence (no hate).
Since I was 30 I went 100% S&P500. As I neared retirement, I realized that between a moderate pension/SS/emergency cash, I could ride out a major downturn in the market and so I stayed 100% in the S&P500. Now nine years after retirement my S&P has almost tripled.
I have a non elective profit sharing, need to find out how that effects my personal limit.
My employer automatically enrolled me in a target date fund and automatically raises the percentage saved every year unless you stop it. Love it!
My employer use to do a massive 5% match, plus a profit share that typically was in the 8-14% range of my income... That is a big part of how I was able to catch up the last few years. We went through a merger a while back, and we still get a match and profit share, but it is closer to a 4% match to my 7%, and a profit share that is expected to be closer to another 5%...which is a little disappointing, but still pretty great.
I guess the silver lining is that the smaller 401k match options means that I can put more towards my own self directed options. With the crazy 401k match that I was getting it would have put me in a weird spot for taxable vs untaxable retirement income. The way it is now allows me to have a better balance between traditional and Roth contributions, plus have a little more to put in non-retirement investments to help pad my income out and make me a little less dependant on my job. It's an all of the above strategy, and I couldn't be happier with the results so far!
i always wonder, is the average balance per account? I changed jobs in my 20’s so I had two accounts.
i always wonder that with general retirement balances as well. My thought is that the studies are really just per account. not per person. let me know if i’m off base here.
I’m 100% stocks , I will change it to more conservative when I’m 10 years out from retirement.
Why?
@@jbris16 I got a lot of time and when I get close to retirement I don’t want to lost all the money I gained from a crash .
@@jbris16 I do the same, 100% stocks. The reasoning for me is that bonds, annuities, etc, statistically severely underperform stocks. The only reason in my eyes to buy into things outside of stocks and potentially realestate is simply to reduce portfolio volatility but as a young person that shouldn't matter assuming you only invest money you can afford to leave in the market until retirement, which is what you should be doing with IRA and 401k accounts. With that in mind, being in my early 20s I am and intend on continuing to hold 100% stocks until I am somewhere around 5-10 years away from my planned retirement.
For those of you starting early, you might change you mind as you get closer to retirement. You guys may have $1.5 million or more as you approach retirement. At that size, your annual contribution of $23K is really insignificant(1.5%) The gains in the market are the big driving force when you have a very large portfolio. I had about $1.2 as I approached retirement, but I have SS and a pension that brings in about $50K. Anyway, I decided to stay 100% in the S&P500. Nine years later and my portfolio is $3.3 million. Just something to think about if you have a big portfolio.
@@glasshalffull2930 what if you were going to retire in 2008 and your portfolio was 100% stocks . The market crashed and it took almost 5 years to recover now what .
is it worth it to still do 401k without match? Im at a startup where there is no match and the fees are $600 yearly. is it still work it? or should i do a brokerage account? already have roth maxed out
There are many free/low cost brokerages and IRAs better suited. Some even have a small match on contributions (typically 1%)
401k has a higher contrib limit than an IRa. There are some income phase outs depending on your earnings but you can and should do both, if applicable.