Americans are saving more for retirement, but they're nowhere near the 'magic number'
How much did the median 401(k) account balance increase from 2022?
The median 401(k) account balance increased by 29% from 2022, rising to $35,286, according to Vanguard Group's data tracking about 5 million retirement accounts3. This increase is attributed to growth in equity and bond markets, as well as ongoing contributions throughout the year.
What is the "magic number" Americans believe they need for a comfortable retirement?
The "magic number" that Americans believe they need for a comfortable retirement has risen to $1.46 million, according to Northwestern Mutual's 2024 Planning & Progress Study. This figure represents a 15% increase from the previous year and a 53% increase since 2020. However, the average retirement savings for U.S. adults currently stands at $88,400, creating a significant gap between desired savings and reality.
What factors contributed to the increase in 401(k) account balances?
The increase in 401(k) account balances can be attributed to a rise in equity and bond markets, as well as ongoing contributions over the year. Additionally, a significant number of plan participants increased their contribution rates, either through an automatic increase feature or manually.