Planning Your 401(k) by Age 65: What's Realistic and What You Should Target

Retirement planning often feels overwhelming when you start comparing yourself to others. But here’s the reality: most Americans age 65 and older fall significantly short of the $1.8 million that workers say they need for a comfortable retirement, according to Charles Schwab’s 2024 research.

The Real Numbers Behind 401(k) Accounts for Older Workers

Vanguard’s 2024 report on 401(k) participants reveals sobering statistics. For those age 65 and beyond, the average 401(k) balance stands at $272,588. However, this figure masks the typical reality—the median balance is just $88,488, which better represents what most retirees actually have saved.

The gap between average and median tells an important story. High earners skew the average upward significantly, meaning the typical person age 65 is nowhere near that $1.8 million target.

There’s another factor to consider: some of these retirees have already begun drawing down their savings, which explains why the numbers appear lower than expected. Adults in the 55-64 age bracket show a similar pattern, with an average of $244,750 but a median of just $87,571.

Creating a Personalized Retirement Target Instead of Chasing Averages

Rather than benchmarking yourself against broad averages, the smarter approach is calculating your own retirement number. A retirement calculator tailored to your income, expenses, and life expectancy provides far more useful guidance than generic figures.

Input your information realistically—include your expected Social Security benefits, healthcare costs, and planned retirement lifestyle. If your circumstances shift (early retirement, health changes), recalculate your goal. Remember that even the best calculations benefit from a financial cushion for unexpected costs.

Why Your 401(k) Balance by Age 65 Matters Less Than Your Strategy

The median 401(k) balance by age 65 tells you how you stack up demographically, but it shouldn’t dictate your strategy. Some retirees live comfortably on less than $500,000 through careful spending and supplemental income. Others need well over $1 million.

The key difference? Those who plan ahead with specific goals, not those who simply accumulate wealth hoping it’s enough. By determining your unique retirement number rather than fixating on what others have, you position yourself for genuine financial security in your later years.