Retirement: Is Your 401(k) Total Above Or Below Average?

BY PAUL KATZEFF
INVESTOR'S BUSINESS DAILY

02/12/2015 08:02 AM ET

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How does your 401(k) retirement account balance compare with balances for other people your age?

If your account balance lags the average for your age group, that's likely a sign that you need to revise your retirement planning.

You may need to boost the percent of pay that you contribute to your account, or allocate more of it to growth-oriented investments such as stocks and stock mutual funds rather than, say, cash or bonds and bond funds.

To pump up your nest egg's prospects, you should also consider kicking in enough money to qualify for the maximum company match your employer may offer. That gives you more flexibility as well as more cash to put to work as you seek funds and stocks to invest in, as well as an age-appropriate allocation to bonds.

The need to fend for yourself with a 401(k) balance that's as large as possible keeps growing.

Only 7% of Fortune 500 companies offered a traditional pension plan to newly hired workers as of year-end 2013, according to professional services company Towers Watson. That compared with 51% as of 1998.

So how does your 401(k) balance stack up?

The average 401(k) account balance was $248,397 for a plan member who is in his or her 60s with 30 or more years on the job, as of year-end 2013, according to a recent report by the Employee Benefit Research Institute.

For a plan member in his or her 50s with the same tenure — 30 or more years — the average balance was $252,418.

Plan members in their 40s who have worked more than 20 years, up to 30 years, have balances that average $154,228.

The average balance was $66,139 for thirtysomethings with more than 10 years, up to 20 years, under their belts.

And plan members in their 20s, who worked more than five years, up to 10 years, for their current employer, average balances of $18,351.

The overall average account balance as of the end of 2013 was $72,383.



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