Here’s How Much 40 Year Olds Have In Their 401(k) on Average (How Do You Compare?)

As you reach your 40s, you want to be sure you're preparing adequately for retirement. And key to building wealth in your golden years is a 401(k).

Knowing how much you've saved compared to others in your age group can help motivate you to make important financial decisions, and maybe even retire earlier. Here's how much the average 40-year-old has stashed away.

For Americans in their 40s, the average balance of their 401(k) is $409,686, according to financial services company Empower. But the "average" can skew much higher when there are a few very large balances in the data set.

On the other hand, the median gives us a more realistic view. Half of savers are below the median value, while the other half are above it. The median amount for this same group of Americans is $156,675. This means that 50% of Americans in their 40s have less than $156,675 in their 401(k).

This significant difference highlights just how many people in their 40s could save and invest more aggressively for their retirement years. Here are 7 ways to get started.

It's great if you're already contributing a percentage of your salary to your 401(k) retirement account. Then, ask yourself, can you set aside more money now to have a more comfortable retirement later? Perhaps even up to 15%?

Remember, the money you invest in your traditional 401(k) plan reduces your taxable income. So this can lower the amount you pay in taxes. It's a win-win situation for you.

Many employers will match the percentage of your salary that you contribute up to a certain amount — typically 3 or 4%. This is free money. So be sure to take advantage of it. You should contribute at least enough to take full advantage of that match.

Sometimes, employers give you 401(k) matching contributions on the condition that you stay with the company for a certain amount of time. This is called vesting. If you leave the company before the specified time period, your contributions could be rescinded.

If you work for a company where your contributions are not fully vested, be aware of the vesting schedule so you make the most out of your money.

See if your 401(k) plan offers index fund options. Index funds are typically low-cost alternatives to funds that are actively managed by a highly paid professional.

Instead of paying a percent of your retirement to someone who may or may not "beat the market," you could keep that money for yourself.

In 2026, you can contribute up to $24,500 to your 401(k). Maximizing the size of your investment could give you the best chance of securing a financially comfortable retirement. This is true regardless of whether the stock market is going up or down at any particular moment.

Billionaire investor Kenneth Fisher famously stated, "Time in the market beats timing the market." Remember, you're not trading stocks. This is an investment that you want to hold for 20 years or more if you're currently in your 40s. Two decades or more of investment can give your fund plenty of time to grow.

Every dollar you pay in taxes is one less dollar you have to pay for other expenses during retirement. Saving a few bucks a month is a start, but lowering your tax bill could save you many thousands of dollars per year.

The portion of your salary you invest in your 401(k) account is subtracted from your taxable income. This means you'll pay less in taxes overall in that year, and that money will be taxed when you withdraw it. The benefit is that most of us earn much less money in retirement because we no longer have a salary. So, you fall into a significantly lower tax bracket, paying fewer taxes.

However, if you'd rather not be taxed on your withdrawal amount while in retirement, you can contribute to a Roth 401(k) instead. While you won't save money on taxes in the year you contribute, you won't pay taxes on the amount you withdraw.

The good news is, you don't have to choose one or the other. You can contribute to both.

If you're struggling to divert more of your income to your 401(k) because of credit card debt, you're not alone.

Those in Generation X have an average credit card debt of $9,255. Millennials owe an average of $6,648 to credit card companies. Prioritize paying down these high-interest charges so you can invest more in your 401(k).

You may have to make some tough financial changes, but the feeling of financial freedom and a stress-free retirement can be worth it.

Approximately 497,000 people have saved at least 1 million dollars in their 401(k) account — and you could be next. Contribution to a 401(k) plan is one of the best ways to get ahead financially.

So, take a moment to see how the value of your 401(k) compares to others in your age group. You may decide to invest the maximum amount of money per year, switch to a lower-cost plan, or pay off credit card debt so you can invest more.