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401k Retirement Infographic by Personal Capital

Curious to know how much you need to save for retirement? Wondering how much the average 401k balance is? Will $1 million last long enough in retirement? Find out these answers and more by taking a look at this infograph we put together to help you visualize the importance of retirement savings.

401k Infographic by Personal Capital

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42 Comments

  1. Marc D Guerra

    This is Great information. Unfortunately most people are ignorant to these facts. Education can fix ignorance. Thank you or your effort to put this out there. There will always be those that when truth is revealed will categorize it as Scare Tactics. Looking forward to future information like this.

    Reply
  2. KS

    The article would be more clear if the $140k annual spending were clarified. The median annual US spending per consumer unit (ie family) is about $50k. For a 40 year old (median age of labor force), that becomes $130k at age 60 after 3.2% inflation (the average over the past century).

    It would also be helpful to note that the consequence of not saving for retirement is substantially dropping annual spending, which is what most retirees do.

    Reply
    • Anonymous

      This model is over simplified. It doesn’t let you factor in social security income, which would be easy to do, and it doesn’t let you factor in whether house is paid for or not.

      Reply
      • Hostler

        If you are seriously considering retirement savings, you would be a fool to pay off your house if the tax advantages stay the same, and interest rates are below 9%, the long term overall stock market return. Cash liquidity is king especially in retirement. Plus house expenses never disappear anyways so long as there are taxes and maintenance needs, which all homes require.

        Reply
  3. Jim

    They provided a graphic above for comparisons of less than 140k desired per year for retirement. 50k (the lowest the graphic goes) would require approximately 1.25 million in your 401k at the time of retirement.

    Reply
  4. Ditiris

    Whether $140K is a lot as target retirement income all depends on when you’re going to retire and what you assume for the rate of inflation. For 10, 20, 30, and 40 years from now, assuming a target of 80% of your salary, with 3% inflation, those numbers correspond in today’s dollars to a salary of $130K, $97K, $72K, and $54K now, respectively.

    That is, someone making a gross salary of $54K today, who wants to retire 40 years from now at 80% of their current salary, would have a target retirement salary of $140K. Similarly, someone making a gross salary of $72K today, who wants to retire 30 years from now at 80% of their current salary, would have a target retirement salary of $140K. And so on.

    The numbers are not unreasonable, or a scare tactic, in my opinion.

    Reply
    • Brett

      The calculations already account for inflation. So whenever you choose to retire, that $140k will be worth as much as $140k is today.

      Reply
  5. Lori

    Seriously ???????? $140,000 annual budget in retirement. Most people don’t make that in their best working year. Stop the scare tactics and use some realistic numbers.

    Reply
    • Financial Samurai

      Inflation is scary indeed.

      Reply
      • Financial Samarai contrarian

        only if you are assuming inflation will be 14% as it was from 1979 to 1981. If your house is paid off when you retire then you will not need $140K annually to retire.

        Reply
        • andrew vinoj

          Actually if u plan to retire in 20 years that 140k will be of worth 64k current value if u plan to retire in 25 years it will be worth 53k, and some extra money will not hurt.

          Reply
          • Brett

            The calculations already account for inflation. So whenever you choose to retire, that $140k will be worth as much as $140k is today.

        • Contrary Contrarian

          Don’t forget about health care expenses!!!!! By the majority average American’s are over weight and out of shape and have a diminishing health outlook.

          Reply
      • Brett

        Inflation is already accounted for in these numbers. So that $140k annual budget is inflation adjusted.

        Reply
        • Bryan Allen

          Actually, the numbers do not account for inflation. 4% of 3.5 million is 140k. You’d be taking out 140k in first year of retirement, which would be equal to an inflation adjusted amount of today’s dollars, based on your retirement year.

          It’s a pretty conservative number when you consider that it would only be 58k in today’s dollars, assuming 30 years until retirement, which is close to the current average American household income.

          Reply
    • This Guy

      That’s why they provided a graph for various budgets. Look at the line representing your expected annual budget.

      Reply
      • Bex

        My current salary is less than $40k/year and I’m contributing a little of that to retirement savings…so there is not even a figure near my lifestyle….

        Reply
    • Investor

      If you’re in your mid 20s now, the poverty level at your retirement will be $80k-$100k with average inflation. $140k won’t be much in 40 years.

      Reply
    • JM Villegas

      that 4% rule is accurate, but remember that there’s still taxes in a 401k, Traditional IRA or a pension. ANY QUALIFIED ACCOUNT. You need to have what we call a 3-legged stool. Social Security (which avg. $1650 annually), Your qualified account and any cash you’ve saved. Also, if you retire before 66, Social Security will penalize you 25% of what you are supposed to receive and they also deduct $1 for every $3 you take out of a qualified account.

      Reply