401(k) Balance by Age and Percentile: What the Latest Data Reveals

Wondering how your retirement savings stack up against your peers? The answer might surprise you. Recent data from two of America’s largest retirement plan administrators—Fidelity, which manages over 21 million participant accounts, and Vanguard, with approximately 4.7 million participants—shows significant variation in 401(k) balances by age and percentile, revealing important insights about how Americans are saving for retirement.

Understanding 401(k) Balances Across Age Groups and Percentiles

The average 401(k) balance tells only part of the story. When we break down balances by age and percentile, a more nuanced picture emerges. For instance, Gen Z workers currently on Fidelity’s platform have an average balance of $5,300, but those in the 90th percentile—meaning they’ve saved more than 90% of their peer group—hold just $13,700. This stark difference illustrates why percentile rankings matter more than raw averages for personal retirement planning.

Fidelity’s data shows that participants who have remained invested for 15 years experienced remarkable growth, with balances climbing from $64,900 in early 2007 to $482,900 by early 2022. This demonstrates the compounding power of consistent, long-term investing—a principle that holds true regardless of where you fall in the age and percentile distribution.

Why Percentile Ranks Matter More Than Averages

Mike Shamrell, vice president of thought leadership at Fidelity Investments, explains that averages can be misleading. New workers joining the workforce with zero balances, recent job changers rolling funds into IRAs, and highly successful savers with substantial portfolios all skew the numbers. That’s why examining both average and percentile-based data—particularly looking at where you stand among workers your age—provides a clearer benchmark.

Vanguard’s principal of strategic retirement consulting, David Stinnett, emphasizes another critical point: 401(k) balances represent only a portion of retirement savings. Workers may hold additional IRAs, previous employer plans, spousal accounts, real estate, pensions, and Social Security benefits. The percentile ranking of your 401(k) alone doesn’t determine retirement readiness.

The Savings Rate That Matters Most

Despite economic uncertainty in recent years, Fidelity data shows that workers “maintained course” in their retirement strategies. The total savings rate across all Fidelity-managed 401(k) plans reached a record 14% in early 2022—combining both employee and employer contributions.

Remarkably, only 5.6% of 401(k) participants modified their asset allocation, and over 80% of those who did made just a single adjustment. This consistency aligns with expert guidance: long-term investors should resist market-driven panic and focus instead on what they can control—primarily their contribution rate.

Benchmarks for Your Age and Career Stage

Rather than obsessing over percentile rankings, Fidelity recommends using these age-based savings targets as goalposts:

• By age 30: 1x your annual salary saved
• By age 35: 2x your annual salary
• By age 67: 10x your annual salary

Shamrell notes that while these guidelines aren’t rigid rules, they provide a framework for retirement success. The specific percentile rank of your 401(k) by age matters less than whether you’re on track toward these multiples of salary.

Building Your Retirement Savings Strategy

Both Fidelity and Vanguard recommend targeting a 15% annual savings rate, combining employee and employer contributions. If that feels unattainable initially, prioritize capturing your full employer match—otherwise you’re forfeiting free money.

Consider increasing your contribution rate by 1-2% annually until reaching the 12-15% target. The median 401(k) balance by age and percentile will improve naturally through consistent contributions and diversified, low-cost investing.

The Cost Factor: Small Fees, Big Impact

Investment costs compound over time just as returns do. Vanguard’s analysis found that a 0.37% annual fee difference on a $100,000 portfolio generating 6% average returns over 30 years results in over $55,000 in lost wealth. Employer-sponsored 401(k) plans typically offer institutional-class mutual funds with lower expense ratios than retail alternatives, making them ideal for long-term accumulation.

Target-date funds and balanced funds now serve as defaults in most plans, automatically adjusting your allocation based on your age and risk profile—removing the need to constantly monitor your 401(k) percentile rank relative to others.

The Bottom Line: Consistency Beats Percentile Watching

Your position in the 401(k) percentile distribution by age matters far less than your commitment to consistent, disciplined saving. Workers who maintained their contributions throughout market volatility significantly outpaced those who didn’t, regardless of where they started in the percentile ranking.

Remember: retirement saving is a marathon. Focus on your personal targets, maintain your savings discipline, and let compound growth do the heavy lifting. That approach has proven far more effective than chasing percentile rankings or comparing yourself to peers.