Here are the average 401(k) plan balances by income: how do you compare?

Vanguard, the administrator of the 401(k) plan, recently published the average and median 401(k) balances by income in its How America Saves 2022 report. The data comes from 1,700 qualified Vanguard pension plans covering nearly 5 million member accounts.

You can use these balances as benchmarks to gauge your own retirement savings efforts against others in your income bracket. Take a look at the numbers in the table below. And read on for the essential steps to achieving — and then exceeding — those average account balances.

Participant income

Average account balance

Median account balance

Less than $15,000



$15,000 to $29,999



$30,000 to $49,999



$50,000 to $74,999



$75,000 to $99,999



$100,000 to $149,999



$150,000 or more



Table data source: Avant-garde.

Two takeaways stand out from these numbers. First, high-income savers have higher incomes retirement fund. It makes sense since they have more money to contribute. Many also worked and saved longer than lower-income participants.

Second, average account balances are much higher than median balances, a point that needs a bit more explanation.

Average balances are higher

Image source: Getty Images.

In case it’s been a minute since you’ve worked with means and medians, here’s a recap. You calculate an average by adding the account balances and dividing by the number of accounts.

The median, on the other hand, is the middle value. Imagine listing all account balances, from smallest to largest. The median is at the midpoint: half of the account balances are above the median and the other half are below.

If account balances were evenly distributed, the mean and median should be similar. In this case, they are not. This is because there are a small number of large account balances that drive up the average. Although half of members who earn less than $15,000 annually have a retirement balance of $3,341 or less, some have saved more — much more.

Think of it this way: the median is more indicative of what most people have saved. And the average hints at what is possible for the disciplined saver.

Beat the average retirement savings balance

No matter how your savings compare to the average and median balances, there’s always room for improvement. If you’re behind, start by catching up. If you’re on the right track, work to become the saver that drives up the average.

The tactics needed to achieve these goals are not complicated. Here are the basics in five steps:

  1. Increase your contributions now and every year, without fail. Even a small annual increase in your premium rate can make a huge difference over time. Keep increasing your contributions until you reach the annual IRS ceiling.
  2. Invest according to your age. Invest primarily in stocks in your youth. As you get older, gradually increase your exposure to fixed income instruments. The Rule of 110 can guide you here: subtract your age from 110, and the answer is your target equity exposure percentage. So, at age 40, your investment mix would be 70% equity funds and 30% fixed income funds. It gives you growth when you’re young and greater protection as you get older.
  3. Get your complete 401(k) employer match. Do whatever it takes to get your fill employer game, even if it means cutting coupons or riding your bike to work so you can increase your contributions. If your employer matches $1 for every $1 you contribute, you immediately double your money. Don’t miss this.
  4. Keep investing. Continue to contribute every month, even if the market is going through a bad patch. Your money buys more when stock prices are falling.
  5. Stay invested. Entering and exiting the stock market reduces your returns. Stay invested, even when your portfolio balance drops. Trust that the market will recover and return to growth. He always had before.

Push past income limits

Your income limits the amount you can save for your retirement, but there are ways to overcome these limits. In the short term, redo your budget to increase your contributions. You should also maximize your employer, invest according to your age, and stay committed to your investment plan. In the longer term, work for a bigger salary.

Your efforts will be rewarded. In time, you will probably save your peers. But even better, you’ll build your wealth momentum and secure the comfortable retirement you deserve.

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