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How Much Should I Have In My 401k? (At Age 20, 30, 40, 50, and 60!)

A 401k is the most common way people invest in their retirement. According to a research survey from Charles Schwab, most believe they need $1.7 million to retire, and many are not investing enough to reach that goal.

If your palms are sweaty when retirement savings pop into your head, you are not alone. Use the information here as a guide and self-check. If you’re not where you want to be, then it’s time to make changes to your finances and work towards your goal.

This post was written by our staff writer, Lindsey Smith.

Asking the question, "How much should I have in my 401k?" Here's the answer by age!What Is a 401k?

Your 401k acts as a retirement investment account that is sponsored by your employer, where you can invest some of your earnings (pre-tax). Over time your contributions will likely grow, and you can start to withdraw money from it when you reach 59.5 years old.

Because it is sponsored by your employer, they will usually offer something called employer match. Take advantage of this as much as you can, because it’s free money! The percentage they will match varies among employers, but generally they will offer to match your contributions to a particular limit.

Always, always do what you need to do to get the employer match.

Another little perk to using a 401k – because these are contributions you make before tax, you could be bumped to a lower tax bracket, depending on your income.

What To Do If Your Employer Doesn’t Offer a 401k

You’re not alone. According to research done by PEW, 41% of millennials, 35% of Gen Xers, and 30% of baby boomers have no access to an employee-sponsored retirement plan.

There are some solutions though:

  • You could open an IRA that you can contribute pre-tax earnings into, and shoot to max out the allowances each year.
  • Or you can start a Roth IRA, which allows you to invest post-tax earnings.

The best part of a Roth IRA is that it allows your money to grow tax-free, so unlike the pre-tax IRA and 401k, you won’t be charged tax when you withdraw.

Related: The Truth About the Traditional 401k and the Roth 401k

How Much Should I Have in my 401k at 20?

Breathe a sigh of relief – at this point you probably don’t have any savings for retirement, and that’s completely fine. You’re likely just finishing college and are fresh to the working world, so you haven’t had enough time to build up savings.

Right now you should be working hard at paying off any student loans or debt from credit cards.

However, if your employer offers a 401k, you should always put enough in there to get the company match. Take everything else and throw it at your debt. This is a solid foundation on which to build your retirement savings from.

how much should I have in my 401kHow Much Should I Have in my 401k at 30?

Boom, you’ve hit 30 – how did that happen? Well, you have now built up some time in your job, and hopefully your salary has increased. If not it might be time to ponder ways to raise your income. 

You might be thinking about starting a family, and are about to buy your first house. You’ve likely paid your loans and credit cards from when you were in college, or are close to getting rid of that debt.

In your 401k, you should have saved the amount you earn in one year by now. For example, if you earn $50k/year, you want to have around $50k in your 401k.

If you’re laughing in fear right now, don’t stress. Get serious about contributing, and consider doubling what you put from each paycheck. Make it a recurring payment that goes directly into your 401k.

Related: How Much Should You Have Saved by 30?

How Much Should I Have in my 401K at 40?

By now, you’ve statistically moved into a bigger home, have a family, and feel a little more financially stable. Hopefully your income has again risen over the last decade. Though it’s best not to have credit card debt or student loans at this point, a lot of people still do, and that’s okay. 

At age 40, you want to have three years of salary inside your 401k.

Let’s say you’re now earning $70k per year, your 401k should be around $210k.

TD Ameritrade surveyed thousands of people, and found that nearly 2 out of 3 people in their 40s have less than $100k saved for retirement. So if that number made your heart stop for a second, you’re not alone.

You’ll want to start playing some serious catch-up though.

Get focused on contributing as much as you can, and possibly boosting your bottom line with a better job or part-time job on the side.

Related: Jobs That Make the Most Money (Both the Typical AND the Unusual!)

investing after 50How Much Should I Have in my 401K at 50?

If you intend to retire by 65, you have about 15 years of career left to go. Up until now, you were limited to a maximum contribution of $19,500 per year. That limit increases when you turn 50 to $25,500. If you like the stock market investment world, keep putting the maximum you can into your 401k.

By now, you want to have your 401k savings at about 5 years of salary.

Per our example, you’re now making $80k per year. You want to have around $400k in your 401k..

Are you still paying on your mortgage? Now is the time to ferociously pay it off, as it will make your retirement much more difficult.

Also consider diving into passive income streams. Investments, rental properties, whatever fits you in your life. This will make retirement living much more financially comfortable.

How Much Should I Have in my 401K at 60?

Ok kids, you’ve made it! By now the hope is that you could retire in 5 years. Your income is leveling out, and you can keep contributing until you decide to officially retire.

At 60 years old, you want to have between $700k and one million dollars in your 401k. 

At this point, you can move away from the riskier investments. This will help protect your retirement nest egg from stock market downturns.

investHow Do I Invest my 401K?

If your employer happens to offer self-directed investment options, you can decide what investments you want for your 401k. Learn more about the following when deciding on your 401k allocations.

Index Funds

Index Funds are a passive investment strategy that follow specific benchmarks, for example, the S&P 500. They have lower fees than an actively managed investment because they’re all automatic market trackers. They are high performing at a low cost.

Related: 5 Reasons Why Index Fund Investing is a Great Strategy for Beginners

Mutual Funds

Similar to index funds, mutual funds  are made up of stocks and bonds, however they are actively managed. These are usually high risk, as they try to beat the markets rather than track them. They will have higher fees (because someone is actively managing them) and they may or may not perform better than index funds.

Related: Can Your Mutual Funds Beat the Stock Market?


ETFs, or exchange traded funds, include stocks, mutual funds, and bonds, and are sold on an exchange. These are the ones that are liquid, and traded throughout the day.

Related: 3 Ways to Put Your Investments on Autopilot

Individual Stocks

The previous three have been groups of securities or commodities you can buy, but you may want to also think about buying individual stocks. They are the riskiest and can change quickly in value, particularly when you’re looking across 30 years time.

Investing in Your 401k – Your Future is at Stake!

Focusing on a diverse portfolio is the best for your 401k, as you’ll get both growth and stability over the long term.

There are various factors that can influence your life and put you ahead or behind of each of these benchmarks. Keeping them as a guide can help you prepare for a comfortable retirement.

How are you tracking with your 401k? Are you ahead or behind?

Grow Rich Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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