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What's a More Typical 401(k) Balance: $12K or $86K?

Posted by: Lauren Young on October 8, 2009

Several readers asked how is it possible that the typical U.S. worker had an average balance of $86,513 in their 401(k) account at the end of 2008, based on data this week published by the Employee Benefits Research Institute and the Investment Company Institute.

Great question.

So let’s dig a bit deeper: I included in my post a link to the EBRI/ICI report. You’ll see that this research covers people who consistently held a 401(k) from 2003 to 2008 (Page 8 in the report).

And while the AVERAGE balance for those folks exceeded $80,000, their MEDIAN 401(k) account balance was $43,700 at yearend 2008.

But here is the number might make the most sense to readers: The median account balance for ALL 401(k) participants (based on a sample of six million plan participants in the database of 24 million) was a mere $12,655.

Do you think $12,655 is a more realistic account balance for the typical worker?

Why or why not?

Reader Comments

Phil Mintz

October 8, 2009 3:17 PM


If you count all 401(k) participants, then that would also draw in those who are just starting out in their careers and have minimal balances. The number that I think would make the most sense would be those for workers within 10 years of expected retirement.

--Phil Mintz


October 8, 2009 5:09 PM

That would include all those that might have contributed for one year and stopped. Those that have just started. It would also include those that left the firm and have another 401K somewhere else.

Bottom line is that its each person's responsibility to save. If you don't.....don't come crying to me later asking for higher taxes so that you can keep living a lifestyle - you should have dialed it back when you were buying that third car and flying first class to Hawaii for holiday.

American's need to be told they are responsible for themselves. If you didn't save then keep working.


October 8, 2009 5:27 PM


I hear what you're trying to say. For someone like me, it is tremendously difficult to save away anything. I am a single parent to a 6 year old girl who hasn't seen her mother in years. I don't have very much family and its been a struggle all along. I am not complaining, I just want to emphasize that it is not that easy. I have had a pretty darned good job (to me) here going on 4 years now, and hard as it was, I decided that I would contribute 1% of my income (my employer will contribute up to 3%) I keep planning on increasing my contribution, but things keep happening that prevent me.

At any rate, your email seemed a bit judgemental, and presumptive. Perhaps I am just a little touchy today.

Gene South

October 8, 2009 8:13 PM


Stop complaining. You had no right to have a child if you are so irresponsible with money.

Who is going to support you when you are old? Your daughter? I doubt it.

Good luck,'ll need it.

dallas salisbury

October 8, 2009 9:17 PM

Great question.

That is why the report provides all of the numbers for all participants by many factors including age, tenure, etc. And, for two continuous groups. In the report, those 2003 to 2008 and in the appendix, 1999 to 2008. And, as the comment above notes, the data for those over 60 with over 30 years of tenure provides a picture of what these programs can do for a full career worker. Any average is misleading, but using many averages for different groups, and also publishing medians, allows the user to get a complete picture. Just the facts is the role of EBRI. Not advocacy of what should or should not be. I encourage everyone to look at the detailed study to compare themselves to those fitting their income, age, tenure, to see how you are doing in relative terms.


October 8, 2009 9:24 PM

Mo makes a valid point. While my financial situation appears stronger than hers (no children, stable teaching job for almost 15 years) life happens.

And I don't mean happenings like buying that 3rd car lol.

While I am able to make steady contributions to my 403B I am far behind the goal I set for have in the account by age 50. I husband just recently fund himself laid-off and this isn't the first time (the hisghs and lows of Silicon Valley) so my savings had seen major cutbacks in the last six months. Not complaining, just thank God I HAD a savings!

Most of us are struggling to make it on our incomes in the face lay offs, rising food and utility costs. The lower figure makes MUCh more sense to me than the higher one Lauren mentioned.


October 8, 2009 10:27 PM

What a confusing piece of noninformation this is. A person 25 years old may have 12 grand, while a person 55 may have 120 grand.


October 8, 2009 11:10 PM

there is no such a incentive in most of the chinese companies, but i do think it'll b good to have it 12k.


October 9, 2009 9:21 AM

I was one of the ones commenting a few days back regarding the $86K claim, so yes, I believe $12K sounds more like it. My 401K is well into 6 figures as I am a saver. But, among my peers in my upper middle class neighborhood, I am a "freak". That is correct. Most of my counterparts live well beyond their means. They live for today and could care less about life at 65, and they are typically only 20 years from that point. It is the old cliche. "You can't take it with you". The odds are they will reach 65 some day. Unfortunately for me, I'll probably be struck by a bus.......


October 9, 2009 4:12 PM

According to Fidelity, the avg. 401(k) balance for investors in its company groups is about $50k. Here's some more information:

Fidelity Investments, the country’s largest provider of retirement savings plans for employees reported last week that the average 401(k) retirement plan rose 13.5% in the 2nd quarter of 2009. In this report, Fidelity also released a report showing analysis of participant behaviour at different life stages and ages that is discouraging or preventing millions of Americans to save towards their retirement.
In addition to more than 300 Fidelity mutual funds, the company offers discount brokerage services, retirement services, estate planning, wealth management, securities execution and clearance, life insurance, etc.

In its retirement division, the company holds 17,500 corporate defined contribution plans and 11.2 million participants’ 401(k) plans. A study done in the 2nd quarter of 2009 showed that the portion of participants increasing their deferral rate in the second quarter was larger than the portion decreasing the rate. This reverses the trend that occurred in the last 3 quarters, where participants were steadily decreasing their salary deferral rates, and making lesser contributions towards their 401(k) plans. Fidelity reports that the average account balance rose 13.5% in the 2nd quarter from the end of the first quarter 2009 to $53,900, thanks to the rising stock markets and added salary deferrals and contributions from plan participants.


October 10, 2009 1:01 PM

This is the problem in the US. You have to pretend you work for a company with a pension plan. Most pension plans would taken 7.5% of your pay and when you went to retire they would provide you with 40% or more of your income. If you pretend it is mandatory you will learn to live within you means. If you had a job with a pension you would have no choice so what is the difference?

A Rothman

October 25, 2009 12:34 PM

Last balance $152,000. Age 42. People really need to save. Especially if you have no pension. I max out every year. Having things and spending is fun, but will you have enough money for retirement?


October 26, 2009 6:37 PM

Even a 401K balance of $86,000 would only buy a female retiring at age 66 an annuity that pays about $516 a month. Add in $2,200 from Social Security and we are still not talking about a lot of money. Many Americans in private sector jobs will be working well into their 70's to cover their mortgage, their property taxes and their credit card debt. For them, there will be no conventional retirement.

November 9, 2009 7:57 PM

Please visit for further info and resources

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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