Only 100k in 401k at 50

[Anonymous]

Anonymous wrote:I don't have data to back up my claim but if I had to guess I'll say the median 401k balance for a 50 years is around $100k and the average probably around $500k. There is big income disparity between college and non cell grads.

I just looked it up and that was a good guess. From federal reserve survey of consumer finances it’s 115k/313k for the 45-54 age range.

[Anonymous]

Well considering you have 25 years to when RMDs start even if you stopped investing today at 100k at 50 and kept it in Stocks which can double every 7 years you will have:

200k at 57
400k at 64
800K at 71
1.3 million at 75

you are extremely young only 50 meaning born in 1975 you are barely out of diapers.

Uncle Same starts catch ups at 50 in the 401k. Which means with retirement at 67 you have 17 years of supersized 401k contributions ahead of you. You can easily put 2 million in by 67 if you do the max and get a good match and do mainly stocks.

Work till 70 which is max SS and maybe you get to 3 or 4 million.

You are so young to be worried about this. Now go back to your mothers basement and finish your video games.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't have data to back up my claim but if I had to guess I'll say the median 401k balance for a 50 years is around $100k and the average probably around $500k. There is big income disparity between college and non cell grads.

I just looked it up and that was a good guess. From federal reserve survey of consumer finances it’s 115k/313k for the 45-54 age range.

From Fidelity, The average 401(k) balance for individuals in their 50s is around $592,285, with a median balance of $252,850. Some data sources show a range between $199,900 and $592,285 for those in their 50s. Fidelity found that 50-54 year olds had average balances of $199,900, while 55-59 year olds had $244,900.

[Anonymous]

Don’t beat yourself up OP. It is what it is. I think you will be fine, you realize you needed to make more money and you found a job with more pay. You realize you are going to need to save more, you will put your plan into action.

As for your daughter, wanting to go to Harvard, please encourage her to speak her dreams into reality. Where there’s a will there’s a way. Tell her you want her to go there too, and you’ll help do whatever is possible. Look for grants loans and financial aid. Harvard has huge endowments.

Good luck, keep the faith, and keep on keeping on.

[Anonymous]

If you are a single parent, your kids will most likely get financial aid for college. Would not be as worried about that. Focus on your retirement, not the college.

[Anonymous]

No additional advice, just an "atta girl." If you have some savings and no debt, you're doing better than a whole lot of people earning way more than you. Ant vs grasshopper, ant wins.

[Anonymous]

Anonymous wrote:Your best earning years are to come so just keep saving as much as possible. Your kids might need to start off in CC or live at home to go to an in-state school. Prioritize your savings over their college savings.[/quote]

THIS. You can finance college, you can not finance your retirement.

[Anonymous]

Encourage community college for your daughters when the time comes. If you are in VA, good grades at a community college can guarantee entrance to wonderful schools junior year, including UVA. Also echo the scholarship remarks people have made. And I’d think you’d qualify for financial aid given your salary.

Congratulations on the new job!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't have data to back up my claim but if I had to guess I'll say the median 401k balance for a 50 years is around $100k and the average probably around $500k. There is big income disparity between college and non cell grads.

Fidelity found that participants between 50 and 54 had account balances of $199,900 on average, while participants between 55 and 59 had $244,900. This account data is based on 26,700 plans and 24.5 million plan participants as of December 31, 2024.
https://www.investopedia.com/average-401k-balance-50-year-old-8773972#:~:text=Fidelity%20found%20that%20participants%20between,4

Also 401ks underperform the S&P by 25-50%.

That is all so shocking!!! Why wouldn't people put their 401K into a SP500 type fund?!?! You have decades to go, let it grow!

Also, we need so much more financial education in this country. My 25yo already has $50K in a ROTH IRA (been investing in that since they had income and into a SP500 fund) and another $50K+ in their 401K. Now yes, they don't have student loans, but they are smart enough to know "time is your friend" and take advantage of not having $700-1000/month loan payment and just invest as much as you can. They live decently, but not extravagantly and focus on saving and getting the company match

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't have data to back up my claim but if I had to guess I'll say the median 401k balance for a 50 years is around $100k and the average probably around $500k. There is big income disparity between college and non cell grads.

Fidelity found that participants between 50 and 54 had account balances of $199,900 on average, while participants between 55 and 59 had $244,900. This account data is based on 26,700 plans and 24.5 million plan participants as of December 31, 2024.
https://www.investopedia.com/average-401k-balance-50-year-old-8773972#:~:text=Fidelity%20found%20that%20participants%20between,4

Also 401ks underperform the S&P by 25-50%.

OP, please don't be scared by what this poster is trying to imply about 401(k) with this underperformance comment.

Yes, on average 401(k)s do underperform the S&P 500, but that's not alarming. Some is due to asset allocation. If you want to hold a portion in bonds, you can expect lower returns but also generally with the trade off of lower volatility. Some is due to trading behavior vs. buy and hold (indexers who don't mess with their portfolio generally do better over time than even the index itself).

Some is due to being invested in active funds with high fees. Performance of low-fee index funds will compare well to the S&P 500 regardless of whether you hold them inside or outside of your 401(k).

Finally, many here equate 401(k)s with target date funds that are often the employer's default or else blindly chosen by many investors. These often haven't performed as well as S&P 500 in recent years due to often holding a substantial portion of international (as well as more active management with higher fees and a growing bond allocation over time). While true about many target date funds, that's NOT an argument against 401(k)'s, it's an argument for paying attention to your investment choices, associated fees, and choosing an asset allocation you're comfortable with whether that's a target date fund or not.

If you are scared, I'd suggest listening to the Money Guy Show on YouTube vs. as a podcast at first because they show charts on their net worth by age and similar episodes. They often show the power of the first $100k saved and demonstrate how much future contributions can turn into at different ages.

But why would anyone under 60 hold much if any in Bonds? A 50yo has 15 years before accessing any of it, and most likely 30+ more years to live. You want it mostly if not 100% in Stock funds. You can weather a down turn, the end result is you also get the 30-40% yearly returns of the past decades (parts of it at least)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't have data to back up my claim but if I had to guess I'll say the median 401k balance for a 50 years is around $100k and the average probably around $500k. There is big income disparity between college and non cell grads.

Fidelity found that participants between 50 and 54 had account balances of $199,900 on average, while participants between 55 and 59 had $244,900. This account data is based on 26,700 plans and 24.5 million plan participants as of December 31, 2024.
https://www.investopedia.com/average-401k-balance-50-year-old-8773972#:~:text=Fidelity%20found%20that%20participants%20between,4

Also 401ks underperform the S&P by 25-50%.

OP, please don't be scared by what this poster is trying to imply about 401(k) with this underperformance comment.

Yes, on average 401(k)s do underperform the S&P 500, but that's not alarming. Some is due to asset allocation. If you want to hold a portion in bonds, you can expect lower returns but also generally with the trade off of lower volatility. Some is due to trading behavior vs. buy and hold (indexers who don't mess with their portfolio generally do better over time than even the index itself).

Some is due to being invested in active funds with high fees. Performance of low-fee index funds will compare well to the S&P 500 regardless of whether you hold them inside or outside of your 401(k).

Finally, many here equate 401(k)s with target date funds that are often the employer's default or else blindly chosen by many investors. These often haven't performed as well as S&P 500 in recent years due to often holding a substantial portion of international (as well as more active management with higher fees and a growing bond allocation over time). While true about many target date funds, that's NOT an argument against 401(k)'s, it's an argument for paying attention to your investment choices, associated fees, and choosing an asset allocation you're comfortable with whether that's a target date fund or not.

If you are scared, I'd suggest listening to the Money Guy Show on YouTube vs. as a podcast at first because they show charts on their net worth by age and similar episodes. They often show the power of the first $100k saved and demonstrate how much future contributions can turn into at different ages.

But why would anyone under 60 hold much if any in Bonds? A 50yo has 15 years before accessing any of it, and most likely 30+ more years to live. You want it mostly if not 100% in Stock funds. You can weather a down turn, the end result is you also get the 30-40% yearly returns of the past decades (parts of it at least)

I made no comments as to how much anyone should hold in bonds at any age. My points are that 401(k) underperformance metrics are likely comparing to a different asset mix than S&P 500, and that everyone should know what they are invested in and according to their personal circumstances and risk tolerance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't have data to back up my claim but if I had to guess I'll say the median 401k balance for a 50 years is around $100k and the average probably around $500k. There is big income disparity between college and non cell grads.

Fidelity found that participants between 50 and 54 had account balances of $199,900 on average, while participants between 55 and 59 had $244,900. This account data is based on 26,700 plans and 24.5 million plan participants as of December 31, 2024.
https://www.investopedia.com/average-401k-balance-50-year-old-8773972#:~:text=Fidelity%20found%20that%20participants%20between,4

Also 401ks underperform the S&P by 25-50%.

OP, please don't be scared by what this poster is trying to imply about 401(k) with this underperformance comment.

Yes, on average 401(k)s do underperform the S&P 500, but that's not alarming. Some is due to asset allocation. If you want to hold a portion in bonds, you can expect lower returns but also generally with the trade off of lower volatility. Some is due to trading behavior vs. buy and hold (indexers who don't mess with their portfolio generally do better over time than even the index itself).

Some is due to being invested in active funds with high fees. Performance of low-fee index funds will compare well to the S&P 500 regardless of whether you hold them inside or outside of your 401(k).

Finally, many here equate 401(k)s with target date funds that are often the employer's default or else blindly chosen by many investors. These often haven't performed as well as S&P 500 in recent years due to often holding a substantial portion of international (as well as more active management with higher fees and a growing bond allocation over time). While true about many target date funds, that's NOT an argument against 401(k)'s, it's an argument for paying attention to your investment choices, associated fees, and choosing an asset allocation you're comfortable with whether that's a target date fund or not.

If you are scared, I'd suggest listening to the Money Guy Show on YouTube vs. as a podcast at first because they show charts on their net worth by age and similar episodes. They often show the power of the first $100k saved and demonstrate how much future contributions can turn into at different ages.

But why would anyone under 60 hold much if any in Bonds? A 50yo has 15 years before accessing any of it, and most likely 30+ more years to live. You want it mostly if not 100% in Stock funds. You can weather a down turn, the end result is you also get the 30-40% yearly returns of the past decades (parts of it at least)

I made no comments as to how much anyone should hold in bonds at any age. My points are that 401(k) underperformance metrics are likely comparing to a different asset mix than S&P 500, and that everyone should know what they are invested in and according to their personal circumstances and risk tolerance.

*know what they are invested in and invest according to their personal circumstances and risk tolerance

[Anonymous]

Average 401(k) performance has people of retirement age mixed in too, which is another reason it's not a good comparison.

[Anonymous]

Anonymous wrote:Op, you are doing great! Starting plowing money into your retirement accounts. The first $100k is really hard, but you did it! Things will accelerate now. Start plowing money into your retirement accounts up to the max. If you have any room in the budget consider putting $400 a month into a 529 for the oldest kid. Aim to cover one third of state college costs from savings. Anything extra will get rolled over to the next kid if they are also college bound.

I disagree. It would be great to help your kids financially if you can, but it doesn't seem to be in the cards for you. Focus on your retirement vs. school savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op, you are doing great! Starting plowing money into your retirement accounts. The first $100k is really hard, but you did it! Things will accelerate now. Start plowing money into your retirement accounts up to the max. If you have any room in the budget consider putting $400 a month into a 529 for the oldest kid. Aim to cover one third of state college costs from savings. Anything extra will get rolled over to the next kid if they are also college bound.

I disagree. It would be great to help your kids financially if you can, but it doesn't seem to be in the cards for you. Focus on your retirement vs. school savings.

When will college be? If OP decides they enough money in retirement accounts when they turn 59.5, they can withdraw from that without penalty to help fund college.