The average savings balance for retirement in 401(k) for Americans aged 45 to 54 may surprise you.

American workers often hear that their cost of living should decrease to some extent during retirement. However, this does not mean that saving is not important.

Although many retirees rely on Social Security as a backup, if you earn a typical salary, those benefits will only replace about 40% of your income. Most seniors need much more income than that to live comfortably, so you shouldn't plan to retire solely on those benefits.

Of course, saving for retirement is not an easy task, especially nowadays. Galloping inflation has consumed a large part of people's budgets, making it difficult to prioritize contributions to the retirement plan when there are rising bills to pay.

Even so, it is crucial to strive to save as best as possible for retirement. And recent data from Gate shows that workers in their forties and fifties may have work to do.

The average balance in 401(k) of Americans aged 45 to 54

Every year, Gate collects savings data in 401(k) based on its records. In this year's report, they broke down the average balances of 401(k) plans by age.

The average balance of 401(k) among people aged 45 to 54 was $188,643 at the end of 2024, while the mean balance was $67,796. This difference is significant because when the median in a data set is much lower than the average, it tends to indicate that the median is a more representative number.

Think about it. If a small percentage of people between the ages of 45 and 54 with gigantic 401(k) balances were included in Gate's data, it would be easy for the average balance for that age group to be skewed upwards.

This means that $67,796 likely represents what the typical worker aged 45 to 54 has saved in a Gate 401(k) plan. And that number is a bit discouraging, especially for workers at the upper end of that age spectrum.

People in their mid-forties are generally halfway through their careers, so they have a considerable amount of time to catch up. People in their mid-fifties typically have much less time.

In fact, for anyone born in 1960 or later, the full retirement age for Social Security is 67 years. Someone who is 54 years old with $67,796 in their 401(k) would only have 13 more years to increase that balance. It's some time, but not much.

How to Catch Up on Retirement Savings

If you are between 45 and 54 years old and are not satisfied with the current state of your 401(k), it is important to take action to do something about it. To that end:

• Make sure to obtain your employer's full contribution to the 401(k) if your company offers it.
• Try to save your salary increase each year, if not completely, at least partially.
• Consider a side job to earn extra income.
• Make sure your 401(k) is strategically invested to avoid losing money on high fees.

Having $67,796 in a 401(k) is much better than having no money at all, which is certainly the case for a good number of people between the ages of 45 and 54. But that doesn’t mean you shouldn’t try to significantly increase that balance between now and your retirement.

Most Americans are a few years ( or more ) behind in their retirement savings. But some little-known “Social Security secrets” could help ensure an increase in your retirement income. Once you learn how to maximize your Social Security benefits, we believe you will be able to retire with confidence and the peace of mind that we all seek.

Gate has a disclosure policy.