Summary
- • Around 55 million Americans actively participate in 401(k) plans.
- • The average 401(k) balance in the United States is approximately $106,478.
- • The maximum contribution limit for 401(k) plans in 2021 is $19,500 for individuals under 50 years old.
- • Around 93% of companies offer a 401(k) plan to their employees.
- • The percentage of companies offering a match on 401(k) contributions is approximately 79%.
- • The average employer 401(k) match is 4.7% of employee salary.
- • The average employee contribution rate to a 401(k) plan is around 7.6%.
- • About 58% of Americans have access to a 401(k) plan.
- • The median 401(k) account balance for Americans aged 45-54 is $60,000.
- • Over 80% of 401(k) plans offer a target-date fund option.
- • The top 5% of savers have an average 401(k) balance of over $430,000.
- • Baby boomers have an average 401(k) balance of $167,700.
- • Nearly 6 in 10 American households have retirement savings through a 401(k) or similar plan.
- • Women contribute an average of $6,329 to their 401(k) annually, compared to $8,447 for men.
- • Around 30% of workers who are eligible to participate in a 401(k) plan do not take advantage of it.
Attention all money mavens and retirement renegades: did you know that over 55 million Americans are part of the exclusive 401(k) club, with an average balance that would make Scrooge McDuck jealous? With nearly 93% of companies offering this golden ticket to financial freedom, its a shame that around 30% of eligible workers are leaving free money on the table. Dive into the dollars and sense of 401(k) plans with me as we uncover the highs, lows, and surprising statistics behind Americas favorite retirement savings tool.
Average 401(k) Account Balances
- The average 401(k) balance in the United States is approximately $106,478.
- The median 401(k) account balance for Americans aged 45-54 is $60,000.
- The top 5% of savers have an average 401(k) balance of over $430,000.
- Baby boomers have an average 401(k) balance of $167,700.
- The number of 401(k) millionaires reached a record high of 412,000 in Q1 2021.
- The average 401(k) loan balance is $5,000.
- Millennials have an average 401(k) balance of $32,841.
- Roughly 1 in 3 workers have less than $5,000 saved in their 401(k) accounts.
- The average 401(k) balance for male employees is $123,262, while for female employees, it is $91,941.
- In 2020, the average 401(k) plan participant had a balance of $106,478, which was a 5% increase from the previous year.
- The average account balance for 401(k) participants aged 20-29 is $11,600.
- Employees in the financial services industry have the highest average 401(k) balance of $168,380.
- The average account balance for 401(k) plans with 20-29 years of participation is $269,090.
- The average 401(k) balance for participants aged 60-69 is $271,373.
- Among 401(k) participants, 37% have account balances below $10,000.
- The top 1% of savers have an average 401(k) balance of over $1.5 million.
- The majority of workers in the legal industry have access to 401(k) plans, with an average balance of $129,330.
- Women have an average 401(k) balance of $92,856, compared to $121,353 for men.
- Approximately 20% of workers over the age of 55 have more than $250,000 saved in their 401(k) accounts.
- The average 401(k) loan amount is $7,600.
- The average 401(k) balance for participants in their 70s is $252,957.
- The average 401(k) account balance for participants with 10-19 years of tenure is $103,033.
- The average account balance for participants aged 65-74 is $266,613.
- Younger Gen X workers, aged 40-49, with 401(k) plans have an average balance of $137,870.
- The average 401(k) loan interest rate is around 5%.
- Approximately 38% of Americans have less than $10,000 saved in their 401(k) accounts.
- 401(k) participants with more than 20 years of tenure have an average account balance of $170,000.
- Employees in the healthcare industry have an average 401(k) balance of $148,214.
- The average annual account fees for 401(k) plans are 0.45% of assets.
Interpretation
In the realm of 401(k) statistics, it appears we have a financial circus under the big top of retirement savings. From the high-flying acrobatics of the top 5% with balances over $430,000 to the tightrope act of millennials balancing an average of $32,841, the diversity in balances is as varied as the performers in a carnival sideshow. While some are juggling impressive sums like the 412,000 401(k) millionaires in Q1 2021, others are contending with the precarious act of less than $5,000 saved, akin to spinning plates on the brink of collapse. In this financial funhouse, the average balance for male employees shines brighter at $123,262 while female employees twirl closer to $91,941, showcasing a persistent gender imbalance. Ultimately, as participants navigate the twists and turns of account balances ranging from the modest $11,600 for those in their 20s to the golden nest eggs exceeding $1.5 million for the top 1%, the question remains - will retirement success be akin to a grand finale or a disappearing act?
Contribution Limits for 401(k) Plans
- The maximum contribution limit for 401(k) plans in 2021 is $19,500 for individuals under 50 years old.
- Employees can make catch-up contributions to their 401(k) plans if they are 50 years or older, with a maximum limit of $6,500 in 2021.
- Employees can contribute up to $58,000 to a solo 401(k) plan in 2022.
Interpretation
These eye-popping 401(k) contribution figures are like a financial high-five from the future, showing that retirement savings can be both responsible and sassy. It's as if the investment gods are saying, "Hey, you can stash away some serious cash now and still sip margaritas on the beach later. But remember, even if your solo 401(k) plan allows you to contribute up to $58,000 in 2022, blowing it all on avocado toast is not an investment strategy."
Employee Contribution Rates
- The average employee contribution rate to a 401(k) plan is around 7.6%.
- Women contribute an average of $6,329 to their 401(k) annually, compared to $8,447 for men.
- The average employee contribution to a 401(k) plan is $8,447 per year.
- The average 401(k) participant contributes 6.8% of their paycheck to their plan annually.
- 59% of Gen X workers contribute to a traditional 401(k) plan, while 25% contribute to a Roth 401(k) plan.
- Only 44% of workers consult with a financial advisor to help with their 401(k) investment decisions.
- In 2020, the average contribution rate to a 401(k) plan was 8.9%.
- 20% of 401(k) participants take out a loan against their account balance.
- 44% of workers say they would prefer a 401(k) plan with a guaranteed income stream in retirement.
- The average number of 401(k) loans taken by participants is 1.1.
- The average employee contribution rate to a 401(k) plan is 6.8% of their salary.
- Over 60% of workers regret not contributing more to their 401(k) plans.
- The average contribution rate for employees aged 25-34 to their 401(k) plans is 7.49%.
- Nearly 40% of workers feel overwhelmed by the investment choices in their 401(k) plans.
- The percentage of annual contribution increases for 401(k) plans is 3% on average.
- The average 401(k) deferral rate for participants in their 50s is 10.3%.
- Around 15% of 401(k) participants contribute the maximum allowed amount each year.
- Only 27% of workers aged 50-64 feel confident in their ability to make investment decisions regarding their 401(k) plans.
Interpretation
In the world of 401(k) statistics, the numbers tell a story of financial fortitude and occasional folly. From the gender disparity in contribution amounts to the perennial regret over missed opportunities, the dance between retirement savings and present-day financial pressures is as complex as it is common. Yet, amidst the regrets and overwhelm, there shines a glimmer of hope in the form of increasing contribution rates and a desire for guaranteed income streams in retirement. The journey to a secure financial future may be peppered with loans and hesitations, but it is also paved with opportunities for growth and empowerment. So, let us navigate these numbers with prudence and wit, knowing that each statistic is a piece of the puzzle in the grand mosaic of financial well-being.
Employer Offering of 401(k) Plans
- Around 93% of companies offer a 401(k) plan to their employees.
- The percentage of companies offering a match on 401(k) contributions is approximately 79%.
- The average employer 401(k) match is 4.7% of employee salary.
- About 58% of Americans have access to a 401(k) plan.
- Over 80% of 401(k) plans offer a target-date fund option.
- Only 14% of plans automatically enroll employees in a 401(k) plan.
- The average number of investment options offered in 401(k) plans is 25.
- 401(k) plans first appeared in the Revenue Act of 1978 and became official with the passage of the Revenue Act of 1978.
- The average annual employer contribution to a 401(k) plan is $4,030.
- 74% of companies offer automatic enrollment in their 401(k) plans.
- Over 90% of employers think it is important to offer a 401(k) plan to their employees.
- Only about 30% of part-time workers have access to 401(k) plans.
- About 70% of employers offer a match on employee 401(k) contributions.
- The average employer match for 401(k) plans is 4.7% of an employee's salary.
- Over 70% of plan sponsors offer a Roth 401(k) option for employees.
- 401(k) plans were originally created as a supplement to traditional pension plans in the 1980s.
- Only 13% of small businesses with fewer than 100 employees offer a 401(k) plan.
- 401(k) participants typically have an average of 5.8 investment options to choose from in their plans.
- Only 8% of companies offer a 401(k) plan without an employer match.
- 87% of employees report that employer contributions to their 401(k) plans are an important factor in their job satisfaction.
- Over 80% of Fortune 500 companies offer a 401(k) plan.
- 401(k) plans have an average of 87 investment options available to participants.
Interpretation
In the complex world of finance and retirement planning, the statistics surrounding 401(k) plans paint a vivid picture of the landscape employees navigate in their quest for financial security. With 93% of companies offering a 401(k) plan, it seems that the allure of retirement savings is near ubiquitous in the corporate realm. However, the devil is in the details, as only 79% of employers match employee contributions, with an average match of 4.7% of salary – a figure that can make a significant impact on nest eggs. Despite the proliferation of options and the evolution of target-date funds and Roth 401(k) options, only 14% of plans take the proactive step of automatically enrolling employees. It appears that while access to retirement savings vehicles is expanding, the onus still falls on individuals to take the reins of their financial futures.
Participation Rate in 401(k) Plans
- Around 55 million Americans actively participate in 401(k) plans.
- Nearly 6 in 10 American households have retirement savings through a 401(k) or similar plan.
- Around 30% of workers who are eligible to participate in a 401(k) plan do not take advantage of it.
- Approximately 30% of 401(k) participants have outstanding loans against their accounts.
- The majority of 401(k) participants opt for target-date funds as their investment choice.
- Around 45% of plan participants roll over their 401(k) balances when changing jobs.
- An estimated 70% of 401(k) participants are invested in target-date funds.
Interpretation
In a world where 55 million Americans are diligently squirreling away their hard-earned cash into 401(k) plans, it's a shame to find out that nearly 30% of eligible workers are treating their retirement fund like that dusty gym membership they never use. With approximately 30% of participants borrowing against their nest egg and another 45% kissing their balances goodbye every time they switch jobs, it seems like our financial futures may need a serious reality check. But fear not, for the majority seem to have found solace in the warm embrace of those comforting target-date funds, indicating that at least when it comes to retirement, many of us are happy to set it and forget it.
