401(k)'s for the Ages: Seeing Where You Stand
Have you ever wondered how your 401(k) nest egg compares with those of coworkers or neighbors your age? Here's a sneak peek into what Americans have stashed away in their 401(k)'s and how they've invested their money, by age group.
The numbers come from an analysis of some 20 million participants in nearly 54,000 employer-sponsored 401(k) plans done by the Employee Benefit Research Institute and the Investment Company Institute, as of the end of 2006.
20s
You may not bring home much bacon in your 20s. And retirement is probably only a distant dream. Employees in their 20s make up only 12 percent of all 401(k) participants. But the money you do manage to tuck into a 401(k) has a lot of time to grow. Here is a profile of accounts held by 401(k) participants in their 20s:
401(k) Account Balance
| Salary Range | Median Account Balance |
|---|---|
| $20,000-$40,000 | $6,719 |
| $40,000-$60,000 | $16,393 |
| $60,000-$80,000 | $39,383 |
| $80,000-$100,000 | $56,194 |
| More than $100,000 | $57,794 |
401(k)'s and Job Tenure
| Job Tenure | Average Account Balance |
|---|---|
| 0-2 years | $4,571 |
| 2-5 years | $10,414 |
| 5-10 years | $17,120 |
Average 401(k) Asset Allocation
| Type of Investment |
Share of Account Balance |
|---|---|
| Equity funds | 50.40% |
| Balanced funds | 19.00% |
| Bond funds | 7.50% |
| Money funds | 4.40% |
| GICs*/stable value funds |
6.50% |
| Company stock | 9.30% |
| Other | 1.70% |
| Unknown | 1.20% |
*Guaranteed investment contracts. Percentages may not total 100 because of rounding.
30s
As you sign mortgage papers on your first home, perhaps with a toddler wrapped around each ankle, monthly bills might seem more pressing than retirement saving. But as you try to balance family and work responsibilities, don't forget about your nest egg. A quarter of all 401(k) participants are in their 30s. Here is a profile of accounts held by 401(k) participants in their 30s:
401(k) Account Balance
| Salary Range | Median Account Balance |
|---|---|
| $20,000 - $40,000 | $22,839 |
| $40,000 - $60,000 | $38,693 |
| $60,000- $80,000 | $71,897 |
| $80,000 - $100,000 | $114,298 |
| More than $100,000 | $163,769 |
401(k)'s and Job Tenure
| Job Tenure | Average Account Balance |
|---|---|
| 0-2 years | $11,257 |
| 2-5 years | $22,368 |
| 5-10 years | $37,438 |
| 10-20 years | $55,693 |
Average 401(k) Asset Allocation
| Type of Investment |
Share of Account Balance |
|---|---|
| Equity funds | 57.90% |
| Balanced funds | 13.50% |
| Bond funds | 7.40% |
| Money funds | 3.20% |
| GICs*/stable value funds |
5.20% |
| Company stock | 9.60% |
| Other | 2.20% |
| Unknown | 1.00% |
*Guaranteed investment contracts. Percentages may not total 100 because of rounding.
40s
You're entering the peak earning years. And your money still has 20 years to compound before it's time to decide whether the beach or the mountains is the ideal retirement location. Some 30 percent of 401(k) holders are in their 40s. Here is a profile of accounts held by 401(k) participants in their 40s:
401(k) Account Balance
| Salary Range | Median Account Balance |
|---|---|
| $20,000 - $40,000 | $58,957 |
| $40,000 - $60,000 | $78,834 |
| $60,000- $80,000 | $132,531 |
| $80,000 - $100,000 | $196,592 |
| More than $100,000 | $290,349 |
401(k)'s and Job Tenure
| Job Tenure | Average Account Balance |
|---|---|
| 0-2 years | $14,725 |
| 2-5 years | $29,010 |
| 5-10 years | $49,995 |
| 10-20 years | $89,882 |
| 20-30 | $133,321 |
Average 401(k) Asset Allocation
| Type of Investment |
Share of Account Balance |
|---|---|
| Equity funds | 54.30% |
| Balanced funds | 12.60% |
| Bond funds | 7.60% |
| Money funds | 3.40% |
| GICs*/stable value funds |
7.40% |
| Company stock | 11.50% |
| Other | 2.40% |
| Unknown | 0.70% |
* Guaranteed investment contracts. Percentages may not total 100 because of rounding.
50s
You might be thinking about scaling back your career with phased retirement, or perhaps you're just revving it into high gear or considering starting your own business. Be sure to take your retirement plan with you. Fifty-somethings make up 24 percent of all 401(k) holders. Here is a profile of accounts held by 401(k) participants in their 50s:
401(k) Account Balance
| Salary Range | Median Account Balance |
|---|---|
| $20,000 - $40,000 | $76,788 |
| $40,000 - $60,000 | $99,932 |
| $60,000- $80,000 | $163,935 |
| $80,000 - $100,000 | $243,382 |
| More than $100,000 | $367,413 |
401(k)'s and Job Tenure
| Job Tenure | Average Account Balance |
|---|---|
| 0-2 years | $17,854 |
| 2-5 years | $32,532 |
| 5-10 years | $54,491 |
| 10-20 years | $99,794 |
| 20-30 years | $174,272 |
| More than 30 years | $167,806 |
Average 401(k) Asset Allocation
| Type of Investment |
Share of Account Balance |
|---|---|
| Equity funds | 46.70% |
| Balanced funds | 13.10% |
| Bond funds | 8.90% |
| Money funds | 4.40% |
| GICs*/stable value funds |
11.90% |
| Company stock | 11.80% |
| Other | 2.60% |
| Unknown | 0.60% |
*Guaranteed investment contracts. Percentages may not total 100 because of rounding.
60s
That magical Social Security retirement date is approaching this decade. It's time to decide if you want to cash out at 62 with a permanently reduced monthly Social Security payment, try to hold out longer for an increased benefit, or keep working until age 70 to get the maximum monthly amount. It helps if you have a 401(k), too. But 60-somethings make up only 8 percent of 401(k) holders. Here is a profile of accounts held by 401(k) participants in their 60s:
401(k) Account Balance
| Salary Range | Median Account Balance |
|---|---|
| $20,000 - $40,000 | $64,147 |
| $40,000 - $60,000 | $97,588 |
| $60,000- $80,000 | $160,051 |
| $80,000 - $100,000 | $237,303 |
| More than $100,000 | $350,576 |
401(k)'s and Job Tenure
| Job Tenure | Average Account Balance |
|---|---|
| 0-2 years | $20,076 |
| 2-5 years | $31,914 |
| 5-10 years | $51,268 |
| 10-20 years | $93,636 |
| 20-30 years | $157,069 |
| More than 30 years | $190,593 |
Average 401(k) Asset Allocation
| Type of Investment |
Share of Account Balance |
|---|---|
| Equity funds | 39.40% |
| Balanced funds | 12.20% |
| Bond funds | 10.80% |
| Money funds | 6.00% |
| GICs*/stable value funds |
18.80% |
| Company stock | 9.90% |
| Other | 2.40% |
| Unknown | 0.50% |
*Guaranteed investment contracts. Percentages may not total 100 because of rounding.
Sources: Employee Benefit Research Institute, Investment Company Institute
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