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Average 401(k) balances by age: See how your retirement savings stack up

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A record number of Americans are "401(k) millionaires," with retirement balances of $1 million or more, according to the latest figures from Fidelity Investments, the largest provider of workplace retirement plans. But if you're not there yet, you're not alone: The average 401(k) balance is about one-tenth that amount, or $106,000.

Comparing your retirement savings with that average amount may be eye-opening, but spoiler alert: This information alone isn't all that helpful. Rather, it's important to focus on the steps you need to take to get ready for retirement.

Here's how to make sure you're on track.

401(k) balances: You versus the average

The most-recent figures from Fidelity show a broad range in average 401(k) balances, based on factors like age, gender, and how long someone has been an employee.

This graphics shows that the average overall 401(K) balance is $106,000 and breaks the averages down by demographics.

"Don't necessarily use the averages as your benchmark," cautions Christine Benz, director of personal finance at Morningstar, a financial services firm.

That's because such averages don't offer a full picture of how people are investing for retirement. Fidelity's figures only encompass the 401(k)s it manages, and the averages are per account, rather than per worker. People may have multiple retirement accounts, including 401(k)s from former jobs and one or more IRAs, that aren't captured in this data. As a result, the averages may be understated, which makes it tricky to extrapolate how you really compare, Benz says.

Instead, she recommends monitoring your progress against personalized savings goals tied to your salary, which can help you figure out how much money you'll need to retire comfortably.

Fidelity recommends the following age-specific milestones based on your income:

  • By 30: Aim to save at least 1x your income
  • By 40: 3x your income
  • By 50: 6x your income
  • By 60: 8x your income
  • By 67: 10x your income

Achieving these age-based goals assumes you set aside 15% of your income annually, says Katie Taylor, vice president of thought leadership at Fidelity. "That might seem completely unattainable" for some people, she acknowledges.

But you might be closer to that target than you think: Fidelity's recent 401(k) data found that the average employee now contributes 8.8% of their salary to their retirement or to their 401(k) specifically, and employers are kicking in an average of another 4.7% — potentially adding up to 13.5% for some workers. This is significant because for most people, their 401(k) will primarily fund their retirement, Taylor says, and "the more you make it a habit to save, the better your long-term results will be."

How to boost your retirement savings

If rubbernecking has you motivated to boost your retirement savings, that's great. We've previously covered key steps on how to get started — and continue — saving over the long-term.

To boost your retirement savings, you'll need to, well, save more money. While Fidelity recommends that 15% savings goal, Taylor says you may need to work toward that amount over time — and put yourself on a plan to get there.

It's key that you try to contribute at least enough money to your 401(k) to get your employer's full match, Taylor recommends. "Otherwise it's like leaving free money on the table."

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Another "relatively painless way to save more" is to bump up your savings amount if you receive a raise, promotion, or cost-of-living adjustment, Benz says. More than 70% of employers that use Fidelity to manage their 401(k)s have a program that allows you to opt-in to automatically increase contributions each year, according to Taylor.

Even small increases, like saving an extra 1% contribution if you make $50,000, works out to an extra $500 per year — which could grow to nearly $83,000 after 40 years, thanks to compounding interest.

"Any amount counts," Taylor says. "Don't let the fact that you're not saving as much as you think you should preclude you from getting started."

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