/ 401k

Average assets in 401k

Ever wonder how you stack against the Joneses? Money is all but relative. If everyone had 1M$/year salary, then 1000$ would be nothing but pocket change. So understanding how much wealth you have versus the average is important so you can make the right decisions. Whether to know if you're on track to saving for retirement or if you can afford a house.

Wealth statistics:

Here's a distribution of the average US net for household income worth across age groups.
You can also find out what is the 1% for each age group.

Age 10% 25% 50% 75% 90% 99%
18-24 -$20,900.00 -$2,860.00 $4,400.00 $15,600.00 $45,521.00 $388,350.00
25-29 -$22,900.00 -$1,100.00 $9,460.00 $42,000.00 $127,580.00 $594,400.00
30-34 -$16,500.00 $1,600.00 $19,400.00 $90,400.00 $242,450.00 $1,373,300.00
35-39 -$6,100.00 $4,300.00 $36,320.00 $185,806.00 $496,000.00 $2,814,200.00
40-44 -$6,140.00 $8,330.00 $62,200.00 $251,150.00 $761,400.00 $7,282,400.00
45-49 -$2,500.00 $11,060.00 $72,070.00 $305,400.00 $831,780.00 $5,216,000.00
50-54 $0.00 $14,200.00 $122,100.00 $440,400.00 $1,017,000.00 $7,222,100.00
55+ $2,600.00 $44,300.00 $194,700.00 $548,910.00 $1,485,000.00 $10,814,000.00

401k Savings:

Now let's look at the typical 401k savings. For this, we will create a simple scenario of someone who is always maxing out his/her 401k.

Here there is no magic, no crazy 30% Y-o-Y returns or any non-sense. It's based on a simple 5% return, you start investing at 22 and 15000k$ investment per year into your 401k. I don't even count if you have an employer matching it or not.

Age Asset (low) Assets (high)
22-25 $15,000.00 $64,651.88
26-30 $82,884.47 $165,398.46
31-35 $188,668.39 $293,979.48
36-40 $323,678.45 $458,085.06
41-45 $495,989.31 $667,529.98
46-50 $715,906.48 $934,840.68
51-55 $996,582.71 $1,276,004.39
56-60 $1,354,804.61 $1,711,425.35
61-65 $1,811,996.61 $2,267,145.08

Conclusion

You can see that being disciplined pays off. It might sound boring (to invest at 5% consistently) but the math shows you that a little constant can bring you millions (2.2M$ at age 65 to be exact).

Note there are many simplifications done here. In a next post, I will use the S&P index (instead of 5%), add in the inflations.

References

the-net-worth-of-different-age-groups-in-america