When it comes to retirement planning, everyone’s journey is distinct, and your objectives might vary from peers of the same age. Nonetheless, it can be insightful to look at the savings levels of the average American.

Here’s a glance at the typical 401(k) balance for those nearing retirement and a straightforward tip to enhance your savings.

Most Americans Might Have Less Savings Than You Expect

Earlier this year, Vanguard unveiled its 2024 How America Saves report, offering a glimpse into the financial health of the average American. This report included data on the average and median 401(k) balances among participants in Vanguard retirement plans.

For those aged 55 to 64, the average 401(k) balance stands at $244,750. However, the median balance may provide a clearer view of typical savings.

The average figure can often be inflated by high-earners who have set aside millions for retirement, while the median represents the middle point, indicating that half the participants have more and half have less. According to the report, the median 401(k) balance for this age group is only $87,571.

A Simple Method to Increase Your Savings

Although $87,000 is a respectable sum, it may not stretch far in retirement for most individuals. If you feel your savings could use a boost, one of the simplest ways is to fully leverage your employer’s 401(k) match.

Typically, the standard 401(k) match is 50% of an employee’s contributions up to 6% of their salary, as revealed by the Vanguard report. This matching contribution can significantly enhance your savings by thousands each year, and if you’re not contributing enough to receive the full match, you could be passing up free money.

Retirement savings can be challenging, but adopting straightforward strategies can make it more manageable. With the right approach, you might save more than you realize.

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