How Much 401(k) You Should Have in Your 60s, According to New Data

Retirement planning is becoming more complicated for Americans entering their 60s. Costs are rising, people are living longer, and many are unsure whether their savings will last. New data from Empower offers a clearer view of what people in their 60s actually have saved—and how far those balances go as retirement draws closer.

Average vs. Median 401(k) Savings Tell Two Different Stories

Empower says Americans in their 60s hold an average 401(k) balance of $568,040 as of June 2025. On paper, that might look like a comfortable cushion. But the median balance sits at only $188,792, showing how uneven retirement savings really are.

This gap is not just statistical noise:

• A small group with very large balances pushes the average higher.

• Most households fall near the median, not the average.

• Many have already started taking withdrawals at 62 or 65, reducing their balances early.

• Some stopped contributing years ago due to job loss, caregiving, or health issues.

It’s also notable that people in their 50s now hold a higher average balance ($607,055). This reverses older trends, where 60-somethings traditionally had the highest balances. Earlier withdrawals, early retirements, and career breaks have started to show up in the data.

For workers evaluating their own progress, the median is the number that reflects real households—not outliers.

Confidence Is Low, and Expectations Don’t Match Reality

Retirement-related anxiety is rising among older workers. A Western & Southern Financial Group survey found:

• 47% of Baby Boomers don’t feel confident about their ability to retire comfortably.

• 11% are unsure, often because they haven’t run the numbers.

At the same time, expectations for retirement savings continue to climb:

• Boomers estimate they need around $760,000.

• Gen X expects closer to $1.18 million.

Given a median balance of $188,792, the gap is clear.

Why the confidence gap is widening:

• Medical expenses are rising faster than inflation.

• People are living longer, stretching retirement money further.

• Housing costs remain high, especially for older renters.

• Market volatility has become more frequent.

• Many workers are unsure how long they should delay Social Security.

• Caregiving responsibilities (for parents or grandchildren) reduce savings.

These issues mean workers aren’t just looking at a dollar amount—they’re weighing lifestyle, health, family obligations, and housing decisions.

How Much People Actually Need Depends on Their Spending, Not Just Income

There’s no universal retirement number. But planners use two common guidelines to help people estimate what they need.

1. Eight Times Income by Age 60

This benchmark assumes someone wants to maintain a similar lifestyle after retiring.

Example:
If someone earns $75,000 per year, the target would be about $600,000 by age 60.

But this model doesn’t account for:

• whether someone still has a mortgage

• rising healthcare costs

• whether they plan to work part-time

• whether they’ll downsize

• family support obligations

2. The 4% (or 25× expenses) Guideline

This method focuses on lifestyle and costs instead of salary.

If someone expects to spend $36,000 per year, they would aim for:

• $36,000 × 25 = $900,000

This rule is more personalized because it ties savings to expected spending—not income.

Most retirees don’t depend only on a 401(k). The survey found:

• 90% of Boomers

• 71% of Gen X

expect Social Security to cover a large share of their retirement income. Others use IRAs, taxable investments, rental units, part-time work, and pensions to fill the gap.

This mix means a $600,000 target may work for one household, while another may need double that amount.

How People in Their 60s Can Build Savings Faster Than They Expect

Even for people who feel behind, the early and mid-60s offer more flexibility than many realize. Several strategies can meaningfully raise retirement readiness in just a few years.

1. Catch-Up Contribution Limits Are Higher Than Ever

The IRS allows larger contributions for workers in their 60s. In 2025:

• Base 401(k) limit: $23,500

• Ages 60–63: up to $34,750

• Ages 64+: up to $31,000

Workers who maximize these contributions for even two or three years can add tens of thousands more to their savings—plus potential investment returns and tax advantages.

This is especially impactful for people who couldn’t save much in earlier decades due to student loans, childcare costs, or career interruptions.

2. Employer Benefits Are Often Underused

Financial planner Alexa Kane says many older workers still miss part of their employer match—even though it’s one of the simplest ways to increase savings.

• Some companies match 50% to 100% of contributions up to a certain limit.

• Many plans allow automatic annual increases to contribution percentages.

• HR departments often provide free financial guidance that employees overlook.

• Health Savings Accounts (HSAs), if available, can also be invested for retirement.

Kane’s biggest point: “Every dollar of match is money you don’t have to save yourself.”

3. Investment Mix Matters More Than People Realize

Many workers shift too quickly into conservative investments once they hit 60. While reducing risk is reasonable, doing it too aggressively can limit growth during the final earning years.

Key considerations:

• Keeping a reasonable mix of stocks may help balances grow faster.

• Target-date funds automatically adjust allocations but vary by provider.

• Rising life expectancy means portfolios may need to support 25–30 years of spending.

• An overly conservative portfolio may struggle to keep up with inflation.

For savers who feel behind, staying partly invested in growth assets for a few more years can make a meaningful difference.

4. Downsizing Before Retirement Can Create Immediate Savings

More than half of older adults expect to downsize in retirement. Doing it before retiring provides several advantages:

• Lower property taxes

• Reduced insurance costs

• Lower utilities

• Fewer maintenance expenses

• Potentially lower medical costs depending on region

• Access to transit-friendly or walkable areas

A move made 2–5 years before retirement can free up cash and reduce monthly bills, letting workers increase contributions without straining their budget.

Downsizing earlier also helps retirees avoid rushed decisions when health or finances force a move.

5. Professional Advisors Help People Avoid Costly Mistakes

Retirement planning is no longer just about investments. It involves taxes, healthcare, insurance, estate planning, and sometimes international rules.

Common late-stage questions advisors handle:

• Should I delay Social Security to age 70?

• Will Medicare be enough, or do I need supplemental plans?

• If I move to another state, how will taxes change?

• Can I live abroad part-time or full-time without tax complications?

• Should I pay off my mortgage before retiring?

• How do I structure withdrawals to reduce taxes?

According to Kane, many people interested in retiring overseas forget that they still have to file U.S. tax returns and meet each country’s residency rules, which can affect whether the move makes financial sense.

Without guidance, mistakes can become expensive.

The 2025 numbers show a sharp divide between high-balance accounts and the much smaller savings held by most Americans in their 60s. While many are entering retirement with less than they expected, late-career savers still have room to adjust through higher contribution limits, housing choices, and investment reviews. How much ground they can make up depends largely on when they plan to retire and how they manage the next few years.

Also Read: New 401(k) Rule 2026: High Earners Face Roth-Only Catch-Up