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Here's How Much Money Americans in Their 40s Have in Their 401(K) Accounts

Titovailona | Twenty20

The earlier you start saving for retirement, the better.

Many people put off saving for retirement early in their careers because of how distant in the future retirement seems, but experts say that starting to save early can make a huge difference in how much you end up with.

To help you know if you're on track, retirement-plan provider Fidelity set benchmarks for how much you should have saved at every age. By 40, Fidelity recommends having three times your salary put away.

If you earn $50,000 a year, you should aim to have $150,000 in retirement savings by the time you are 40. If your annual salary is $100,000 a year, you should aim to have $300,000 saved.

How much do 40-year-olds actually have in retirement savings?

The average 401(k) balance for Americans between the ages of 40 and 49 is $120,800 as of the fourth quarter of 2020, according to data from Fidelity's retirement platform.

Americans in this age group contribute an average of 8.9% of their salaries.

Putting away three times your salary may seem daunting, but starting off by saving even 1% or 2% of your salary and gradually increasing that figure over time can go a long way toward helping you build up your retirement savings.

And if your employer offers a match, try to contribute enough of your salary to qualify for the full match. It's essentially free money.

How much should you have saved for retirement?

How much you should save for retirement largely depends on the kind of lifestyle you want for you and your family.

That being said, experts at Fidelity recommend that you consistently save 15% of your salary over the course of your career in order to be prepared for retirement.

This is how much Fidelity recommends Americans have saved at every age:

  • By 30, you should have the equivalent of your salary saved
  • By 40, you should have three times your salary saved
  • By 50, you should have six times your salary saved
  • By 60, you should have eight times your salary saved
  • By 67, you should have 10 times your salary saved

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