At 60 years old, it’s not that long until you retire. In fact, the average retirement age is 61, but many Americans continue to work into their late 60s and beyond.
It’s always important to know if your retirement savings are on track. That’s especially true when you’re in your 60s, nearing the end of your career. If you want to know where you stand, check out the data below on average 401(k) balances and tips if you need to save more.
401(k) balance for the average 60-year-old
The average 60-year-old’s 401(k) is between $70,000 and $210,000. Why such a wide range? He has two recent sources and there is a pretty big difference.
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- Vanguard reported The median 401(k) balance for Americans ages 55 to 64 is $70,620 Average balance is $232,710 How will America save 2023?.
- a Empower Articles of 2024 reported that The median 401(k) balance for Americans in their 60s is $209,382 The average balance is $555,621.
The median balance may more accurately represent the overall average. If there is a large difference between the median and the mean, it is because outliers have a large effect on the mean. In this case, people with very high 401(k) balances would raise the average considerably.
Here are some general guidelines for saving for retirement: Save 8 times your salary by age 60 and 10 times your salary by age 67. Based on recent data, many 60-year-olds may be well below that guideline. To be fair, some Americans do have other forms of retirement savings, such as individual retirement accounts (IRAs).
What to do if you fail to pay your retirement allowance
Even at age 60, there’s still time to put more money toward retirement savings. If you feel like you don’t have enough money to retire, here’s what you can do.
Make the most of your 401(k) contributions
The 401(k) contribution limit is $23,000 in 2024. However, one advantage of being over 50 is that you can also make additional contributions of up to $7,500, for a total limit of $30,500. If you can’t contribute that much, make sure to at least invest enough to max out her 401(k) offered by her employer.
Contribute to your IRA too
Like a 401(k) plan, an IRA allows you to save for retirement while saving on taxes. The contribution limit for 2024 is $7,000. If you are over 50 years old, you can make an additional contribution of up to $1,000, bringing the total limit to $8,000 for him.
retire later
Delaying retirement has several financial benefits. The longer you work, the more you can save. You’ll start drawing down your retirement savings later, and you can delay enrolling in Social Security. If you wait until age 70, you can collect your maximum Social Security benefits.
Consider relocation or downsizing
Another way to close the retirement savings gap is to reduce your living expenses. You can also start looking for areas with a lower cost of living for your retirement. Some choose to retire abroad. If you want to continue living in your current city, you can also move to a smaller, more affordable home.
If you max out your 401(k) and IRA, you can save $38,500 a year for retirement, and potentially more if contribution limits increase. After five years, you’ll have added $192,500 to your retirement savings. Your money can grow if you invest in stocks and bonds.
Most people don’t max out all of their retirement accounts, so don’t worry if you’re not contributing that much. Please include as many as possible. That way, you can work longer, potentially save money, and retire financially secure.
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