Average 401(k) By Age, Industry, Income [2023]: Average 401(k) Match + Fees

Research Summary: Most of us look forward to the day we can kick back and relax in our old age. However, this relaxation often wouldn’t be possible without a 401(k). Without this retirement plan, many Americans wouldn’t be able to enjoy tropical paradise at 65.

Luckily, we’ve gathered all the most essential facts about the state of 401(k) plans in the US as of 2023. According to our extensive research:

• The median 401(k) balance for Americans is $20,100.

• The average 401(k) balance is $97,200.

• The average employer 401(k) match is 4.7%.

• 51% of employers with 401(k) plans match employee contributions.

• Only 10% of employers pay the match limit of 6% or more.

• The average 401(k) in-all fee is 2.22%.

• The average per-capita admin fees for 401(k) plans total $422.30.

For further analysis, we broke down the data in the following ways:
Match | Fees | Balance | Demographics | Industry and Income | Participation | Facts | Retirement Plan Participation

401(k) Match Statistics

Many employees value when their employers match their 401(k) plan; however, that doesn’t mean every employer is committed to doing this. To understand more about 401(k) matching among employers, here are some relevant statistics:

Average 401(k) Match By Employers

• The average employer-sponsored 401(k) match is 4.7% of employee contributions.

• 49% of employers with 401(k) plans match 0% of employee contributions.

• 41% of employers who match 401(k) plans don’t pay over the limit of 6%.

• 20% of employers require at least one year of work to match 401(k) contributions.

• 70% of employers offer immediate 401(k) participation.

• 25%-33% of 401(k) funds are vested per year.

401(k) Fees Statistics

While 401(k) plans come with a host of benefits, dealing with fees that come with them is an unfortunate reality. Here are some key facts about 401(k) fees in the US:

• The average annual 401(k) fee charged is 1%.

  However, this number can vary greatly depending on how many people are participating in the plan, which provides the plan, and more. In reality, fees can fall anywhere from 0.5% to over 2%.

• The average per-capita admin fee is $422.30.

  While the true amount varies by company, it’s typically paid by revenue sharing or variable annuity wraps, which many consider to be hidden fees.

• 401(k) fees can increase by up to 3.5% annually.

  Even if an employer were to maintain a fee of 0.75%, you would still owe more and more each year as you gain a higher account balance. For example, 0.75% of $50,000 is only $350, while 0.75% of $1 million is $7,500.

Average 401(k) Balance

Everyone wants to ensure that they have a healthy 401(k) balance as they age, and understanding the latest stats is a great way to gauge where you stand. Here are some major trends within US 401(k) balances:

Distribution of 401(k) Account Balances

• Nearly 39% of all 401(k) account holders have less than $10,000 in their accounts.

  In fact, the majority of account holders (51%) have less than $20,000 in their accounts, signifying that Americans are lagging behind in retirement savings.

• The median 401(k) balance for Americans is only $20,100.

  This is despite the fact that experts recommend a retirement account balance of at least 6x of your annual income when you retire, meaning that someone who makes $60,000 per year would need a 401(k) of $600,000 for a healthy retirement.

• The average 401(k) balance is $97,200.

  The reason why the average is so much higher than the median largely relates to the fact that older and wealthier Americans often skew the data. As shown by the chart, the largest percentage of account balances are on the fringes of the data.

• The average rate of return on a 401(k) plan is 5% to 8% per year.

  While this may depend on market conditions, the return on a 401(k) is typically split between 60% being invested in stocks and 40% in bonds.

Average 401(k) Balance by Demographics

The average 401(k) balance can be affected by a whole host of things, from your age, gender, race, and more. Here are some states that show the key disparities between different demographics:

• Americans 65+ have the highest average 401(k) account balance of $255,151.

  The average 401(k) account balance goes up with age, as workers are able to add to it over time. If you’re young and you’re panicking, don’t worry; the average 401(k) balance for those under 25 is only $6,718 (with the median being even lower).

  Average and Median 401(k) Account Balance By Age

  Age range	Average 401(k) account balance	Median 401(k) account balance
  Under 25	$6,718	$2,240
  25-34	$33,272	$13,265
  35-44	$86,582	$32,664
  45-54	$161,079	$56,722
  55-64	$232,379	$84,714
  65+	$255,151	$82,297

• Only 7.7% of Gen Z have 401(k) accounts.

  

  While this is a very young demographic (18-23), it’s still startlingly low compared to all other generations. For example, Millennials are the next oldest generation, and 49.5% of them have 401(k) accounts.

  Share of Americans With 401(k) Accounts By Generation

  Generation	Share of workers with 401(k) plans
  Gen Z (ages 18-23)	7.7%
  Millennials (ages 24-39)	49.5%
  Gen X (ages 40-55)	56.1%
  Baby Boomers (ages 56-64)	58.1%

• 57.7% of White Americans have a 401(k) plan compared to 31.9% of Hispanic Americans.

  

  While this is the greatest disparity between different races and ethnicities in the US, Black Americans are also significantly less likely to have a 401(k) plan when compared to White or Asian Americans.

  Share Of Americans With 401(k) Plans By Race/Ethnicity

  Race/Ethnicity	Share of workers with 401(k) plans
  White	57.7%
  Asian	54.9%
  Multi-racial	42.5%
  Black	40.5%
  Hispanic/Latino	31.9%

• Men’s average 401(k) account balances are over 45% larger than women’s.

  Men have an average 401(k) account balance of $156,121, compared to women, who have an average account balance of $107,147. The story is similar for median income, where women have an average account balance of $29,095, whereas men have an average account balance of $42,516.

• Women are less likely to have a 401(k) plan overall, with 43.5% having one compared to 47.8% of men.

  This disparity can particularly be explained by the fact that women are more likely to work part-time and, thus, lack benefits. 23% of women work part-time compared to only 12% of men.

Average 401(k) Balance by Industry and Income

Your employer ultimately has a lot of control over the quality of your 410(k) plan, and unsurprisingly, there are industries that offer more generous plans (on average) than others. To find out which industries will have you enjoying a luxurious environment, here are some key averages:

• The Agriculture, mining, and construction industry has the highest average $401(k) account balance of $176,369.

  On the other hand, the Wholesale and retail industry has the lowest average 401(k) account balance of $87,390.

  Average and Median 401(k) Account Balance By Industry

  Industry	Average 401(k) account balance	Median 401(k) account balance
  Agriculture, mining, construction	$176,369	$44,769
  Finance, insurance, real estate	$154,841	$46,562
  Business, professional, nonprofit	$154,716	$38,777
  Media, entertainment, leisure	$151,110	$41,149
  Manufacturing	$141,066	$22,102
  Transportation, utilities, communications	$102,411	$61,488
  Education and health	$97,401	$23,992
  Wholesale and retail	$87,390	$15,658

• Those who make $150,000 or more have the highest average 401(k) account balance of $354,569.

  For the most part, the higher someone’s salary, the higher the average 401(k) account balance. The one exception to this is that those who make between $15,000-$29,999 actually have the lowest average account balance of $15,766.

  Average and Median 401(k) Account Balance By Income

  Income	Average 401(k) account balance	Median 401(k) account balance
  Less than $15k	$16,524	$2,557
  $15k-$29.9k	$15,766	$4,866
  $30k-$49.9k	$29,719	$10,317
  $50k-$74.9k	$69,438	$28,880
  $75k-$99.9k	$121,570	$58,572
  $100k-$149.9k	$193,944	$100,833
  $150k+	$354,569	$195,076

401(k) Participation Statistics

Despite the many long-term benefits of having a 401(k) plan, many Americans either choose not to participate or simply don’t have access to one. Here are the latest trends in 401(k) participation:

• 51% of employees participate in employer-sponsored 401(k) plans when offered.

  While 68% of employees have access, there are some (17%) who choose not to participate. However, the vast majority do.

• 84% of workers say automatic 401(k) investment from paycheck helps them save money.

  Considering how much a 401(k) account balance can increase from age 25 to 65, there’s a reason why the majority of Americans believe this.

• 62% of employers have automatic enrollment for their 401(k) plans.

  This means that all employees will be enrolled in a 401(k) unless they specifically state otherwise and that the employer must specify the percentage of an employee’s wages that will be deducted from each paycheck.

General 401(k) Facts

There are a lot of nuances to the average 401(k) plan. From age to income, several variables can give us important insights. Here are some extra facts to highlight the current state of 401(k) and trends:

• There are $6.3 trillion in assets held in 401(k) plans as of September 2022.

• There are over 625,000 401(k) plans in the US.

• There are over 60 million active 401(k) plans in the US.

• 54% of US adults have either a 401(k) or 403(b) plan.

• 18% of Americans have IRA or Keogh accounts.

• 19% of 401(k) assets are in index funds.

Retirement Plan Participation by Segment

Out of those who participate in 401(k)s and other retirement plans, there are interesting demographic trends. Here are some of the most prominent of those trends:

• 69% of private industry workers have access to retirement plans.

  While this is the majority, it is still considerably less than the 92% of public workers who have access.

• 77% of full-time workers have access to retirement plans.

  As opposed to less than half, or only 39% of part-time workers having access to retirement plans. This shows a clear divide between full-time and part-time work benefits.

• 91% of union members have access to retirement plans.

  Unions are one of the key factors in ensuring employees have access to retirement plans. As 65% of non-union members have access compared to 91% of union members.

• 76% of goods-producing industry workers have access to retirement plans.

  On the other hand, 65% of service-providing industry workers have access. While this is a smaller gap than some of the others listed, it still shows a divide between industries.

• 83% of employees who work at companies with 100+ other employees have access to retirement plans.

  Larger companies have more resources and are, therefore, more likely to offer comprehensive benefits. At companies with less than 100 employees, only 53% of them have access to retirement plans.

• 88% of the top 25% of earners have access to retirement plans.

  The higher the income, the more likely someone is to have access to retirement plans. 79% of the third 25% and 67% of the second 25% have access, while those in the bottom 25% are nearly as disadvantaged as part-time workers, with only 42% having access.

401(k) Match FAQ

1. What is a good 401(k) match?

   A good 401(k) can be considered anything between 5-6%. This is commonly the upper limit of employer matches, with 41% of employers matching anywhere from just over 0% to 6%. However, 10% of employers do match over 6%, meaning it is possible to have even better 401(k) matching.

   In reality, any employer match is better than the alternative, as 49% of employers do not match their employee’s contributions.

2. What is the average 401(k) match?

   The average 401(k) match is 4.7%. The most common match among employers is 50% of what you contribute, so if you contribute 6% to your 401(k), the employer would contribute 3%.

3. What are the average 401(k) fees?

   The average 401(k) in-all fee is 2.22%, with the average annual fee being 1%. In total, the average per-capita admin fee is $422.30.

   It’s important to note that there’s a lot of variability in 401(k) fees, with some plans charging as little as 0.5% and some higher than 2% annually.

4. What are the hidden fees with a 401(k)?

   There are technically no ‘hidden’ 401(k) fees, as all fees must be disclosed. However, the most common fee plan members aren’t expecting to come in the form of revenue sharing. These payments increase investment expense ratios, which ends up reducing investor returns.

   While revenue sharing fees can be a small share of total fees, an average of $2.31 of almost $45 total, it still adds up over time.

5. What is the average 401(k) balance?

   The average 401(k) balance is $97,200. While this might seem like a lot, it’s important to note that an average can be skewed by the extremes of the data. In this case, those with the largest 401(k) may lead the average to be higher than you might expect.

   This becomes even more apparent when you examine the median 401(k) account balance, which is only $20,100. Likely, this number more accurately reflects the account balances of younger, less wealthy Americans.

Conclusion

As of 2023, the average 401(k) account balance is $97,200, while the median account balance is $20,100. While these numbers represent Americans of different ages and backgrounds, who live in different locations, it still marks a concerning trend.

Shockingly, 36% of Americans have never had access to a retirement account, and even more, haven’t been able to save very much. Women, ethnic minorities, part-time workers, and low-income Americans are especially affected by these trends.

With that in mind, having access to 401(k) plans and other retirement benefits is an important way employers can stand out in an increasingly worker-driven jobs market.

References

1. IRS – Retirement Topics – Catch-Up Contributions

2. Fox Business – Average 401(k) balances drop below $100,000: Fidelity

3. BetterUp – What 401(k) employer match is and how it works

4. Employee Fiduciary – How to Find & Calculate Nationwide 401(k) Fees

5. Investopedia – What Is a Good 401(k) Match? How It Works and What’s the Average

6. The Motley Fool – What Rate of Return to Expect From Your 401(k)

7. T. Rowe Price Insights – Race, Retirement, and the Savings Gap

8. United States Census Bureau – New Data Reveal Inequality in Retirement Account Ownership

9. BP – Why 17% of employees don’t participate in 401(k) plans

10. Forbes – 401(k) Auto-Enrollment

11. U.S. Department of Labor – Automatic Enrollment 401(K) Plans for Small Businesses

12. ICI – 401(k) Resource Center

13. U.S. Bureau of Labor – How do retirement plans for private industry and state and local government workers compare?

14. U.S. Bureau of Labor – 67 per cent of private industry workers had access to retirement plans in 2020

Author

Jack Flynn

Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.