If you're lucky enough to have access to a 401 (k) through your employer, take full advantage of it. Only about 53% of employees over the age of 22 have access to a deposit-based plan, such as a 401 (k), according to a Pew survey. Of those who have access to this type of plan, only 38% actually participate.
You can contribute up to $ 19,000 a year to 401 (k), according to the IRS Grant Limit Guidelines for 2019, making it one of the most powerful tools in the retirement planning tool. In addition, if the employer offers any kind of matching contribution, you can receive what is really free money just by cashing in your retirement account.
Having said that, not all 401 (k) s are created equally, and some offer better benefits than others. While you may not be able to switch to a new 401
Your 401 (k) contribution rate is the percentage of the salary you stashing away – which includes both your own contributions and any additional contributions from your employer.
A full 95% of organizations offer some form of employer's contribution – such as matching contributions, profit modules or an ESOP employment record – according to a Vanguard study. Also, by the employers offering similar contributions, the average match is approx. 4.3% of the employee's wages.
The average employee participating in 401 (k) contributes less than 7% of his salary, according to Vanguard, and the average total contribution rate (including employer contributions) is around 10.6%.
According to Vanguard, the average 401k account balance is $ 92,148. But this figure is skewed by energy savers who have hundreds of thousands of dollars stashed away, so a more accurate representation of how much workers have saved is the median amount – which is only $ 22,217.
These figures represent workers of all ages, but the statistics alone do not paint the whole picture – some in their 20s with the $ 90,000 stored are in far better shape than anyone in the 60s with that amount in the Pension Fund. Here you see which median 401 (k) balance looks like by age:
|Age||Median 401 (k) Balance|
|Below 25||$ 1,427|
|25 to 34||$ 8,126  35 to 44||$ 22,123|
|45 to 54||$ 40,243|
|55 to 65||$ 61,739|
|65 and up|| $ 58,035|