Americans had $7.8trillion invested in 401(k)s and$14.3 trillion in IRAs in the first quarter of 2024, according to the Investment Company Institute.
If your retirement savings are a portion of one of those totals, you may have wondered how your plan — and the investment choices you have within it — compares.
Average 401(k) employee contribution: 7.4%
The average annual employee 401(k) contribution was 7.4% of pay in 2023, according to the most recent data available from Vanguard, one of the largest retirement account recordkeepers.
The IRS sets the bar for contributions pretty high: The 401(k) contribution limit for employees is $23,000 in 2024. Those 50 and older are allowed to save up to $30,500 in 2024.
» Dive deeper: Explore average and median retirement savings by age
Average 401(k) employer contribution: 4.6%
Probably the best feature of 401(k) plans is the employer contribution — aka free money — typically provided by matching a portion of what employees save.
There’s a dizzying array of formulas companies use to determine how much of your contributions they’ll match. The most common formula, according to Vanguard’s 2024 How America Saves report, is 50% of every dollar an employee contributes, up to 6% of their salary.
The more telling number is the value of the match. That figure — according to Vanguard — is 4.6% of pay on average per year.
The average total participant contribution rate, combining employer and employee contributions, was14.2% in the first quarter of 2024, according to Fidelity, another leading investment company. That’s right on target, considering experts recommend saving 12% to 15% of your salary for retirement.
Number of 401(k) investment choices: 27.5
In 2023, the average Vanguard plan offered 27.5 investment choices, but some other plans may provide half of that. Per the Financial Industry Regulatory Authority (FINRA), most plans provide at least three options — most commonly bonds, money market funds and mutual funds that offer exposure to domestic and international stocks.
Fidelity says 94.4% of its plan participants default to using target-date mutual funds as of the first quarter of 2024. Known as a “set it and forget it” retirement investment, target-date funds include a mix of investments that automatically rebalance as you get closer to retirement.
Average annual 401(k) return: 9.7%
Many variables determine a 401(k)’s return, including the investments you choose, stock market performance and 401(k) fees.
Those variables make it hard to land on an average 401(k) return, but Vanguard gives us a general snapshot based on the five years ending in December 2023: The average annual return for those enrolled all five years was 9.7%.
Average 401(k) fees: Vary
You might not know it, but if you have a 401(k), you are definitely paying fees to the provider for maintaining your account. These fees can include investment, advice and administrative fees.
Generally, the larger the plan, the lower the fees. Your plan is required to send you a quarterly fee disclosure statement. If you don’t like what you see, consider investing just enough money in your 401(k) to get the company match for the year. Then contribute any additional retirement savings to an IRA, where you have much more control over costs and investment choices.
Average 401(k) balance: $125,900
You skipped all that stuff above to scroll down to this number, didn’t you? No judgment from us. Financial rubbernecking is a beloved pastime.
Without further ado, the average 401(k) balance at Fidelity in the first quarter of 2024 was $125,900.
» MORE: See our breakdown of the average 401(k) balance by age
A smart view of your financial health
Track your retirement savings balances in one place by linking your accounts.
Portion of plans that offer a Roth 401(k): 93.5%
The Roth 401(k) is a mashup of a 401(k) and a Roth IRA, an individual retirement account you fund with post-tax dollars in exchange for tax-free investment growth and withdrawals in retirement.
At Fidelity, the number of plans offering a Roth option has grown, and 93.5% of its plans now offer a Roth 401(k).
Although you don’t get a tax deduction on your contributions as you do in a traditional 401(k), there’s a lot to like about a Roth 401(k). It has larger contribution limits than a Roth IRA and is a convenient workaround for those who earn too much to contribute to a Roth IRA, which has income limits for eligibility.
Average IRA balance: $127,745
According to Fidelity, the average IRA balance was $127,745 in the first quarter of 2024. The plan provider said it has 15.3 million IRAs, a 17% year-over-year increase.
Number of Roth IRAs
Of those 15.3 million IRAs, 62.9% of all IRA contributions went to Roth accounts.
Average IRA contribution: $4,000
The IRS allows investors under 50 to contribute up to $7,000 per year to IRAs ($8,000 for those 50-plus) in 2024.
In the first quarter of 2024, the average IRA contribution was $3,100, up from $2,800 in the first quarter of 2023.
» Learn more: IRA vs. 401(k): How to choose
The bottom line
All of this retirement account talk is also only worthwhile if it inspires you to look more closely at your own savings. Ultimately, it’s all about answering one key question: Am I saving enough, and in the right accounts?
According to the Federal Reserve's 2022 Survey of Consumer Finances, 54.4% of all families have retirement accounts, leaving nearly half of Americans who don't have retirement accounts.
When you distribute by race and ethnicity, you'll see that 61.8% of white families had retirement accounts, compared with 34.8% of Black families and 27.5% of Hispanic families.
That means many people are being left out of retirement savings for several reasons. To learn more about why, see our story on Secure 2.0 and people of color.
» Ready to get started? Read our guide to retirement planning.
