Study Reveals Median 401(k) Balances Broken Out By Income Bracket

At the end of 2014, the average 401k balance was about $18,127. That figure, however, doesn’t begin to tell the full story.

According to the recent analysis by the Employee Benefit Research Institute of 24.9 million 401(k) plan participants, 40% of these have less than $10,000 and 20% have more than $100,000 in their balance.

The study also revealed the median account balance in various income brackets.

U.S. News has the results:

$20,000 to $40,000. It is difficult to save for retirement when you earn a modest salary. “Many people with small incomes think that it isn’t possible to save for retirement, but it really isn’t the case,” says Tim Baker, a certified financial planner for Script Financial in Baltimore. “When you’re young, one of the things that you have a lot of is time, which means lots of compounding periods for your money to go to work for you.” Many workers earning between $20,000 and $40,000 have managed to save something for retirement. The median 401(k) balance for people who have been on the job for five or more years ranges from $7,474 among workers in their 20s to $77,659 for people in their 50s.

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$40,000 to $60,000. Employees earning between $40,000 and $60,000 are likely to have a little more room in their budget to save for retirement. The median 401(k) balance ranges from $16,502 among 20-somethings to $113,504 for workers in their 50s, according to the EBRI analysis.

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$60,000 to $80,000. In this income bracket, even 20-somethings with a few years on the job have managed to accumulate $33,469, which still has decades to grow until retirement. And workers in their 30s have $60,504. Employees who are in their 50s have a median of $174,016, and 40-somethings have $123,554, according to the EBRI analysis.

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$100,000 or more. Workers earning a six-figure salary generally have a much easier time saving for retirement than those who earn less. Fifty-something workers in this income bracket have a median of $434,733 in their 401(k) plan, and long-tenured 40-somethings have $325,054, according to the EBRI analysis.