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Key Takeaways
- The average millennial holds about $83,700 in a 401(k), according to Fidelity.
- Contribution rates are climbing, but many millennials are still making up ground lost to early-career setbacks.
Millennials are closing the retirement-savings gap with older generations, but the headline averages mask how far behind many still are.
Fidelity estimates the average millennial has a 401(k) balance of about $82,600. Millennials include those born between 1981 and 1996.
Millennials in Fidelity plans now save about 9% of their pay, and their employers contribute 4.8%. That’s within reach of the 15% rate advisors recommend, but still trailing Gen X and Boomers.
Advisor Insight
For most Americans saving for retirement, a 401(k) is a key part of their planning. What you put in, and how long you leave it there, will largely determine when you can stop working someday.
How Your 401(k) Compares to Other Millennials
The oldest millennials are pushing 45; the youngest are nearing 30. Older millennials’ savings are doing markedly better. Fidelity’s data shows millennials who’ve stayed in the same 401(k) for at least five years have balances well above the generation-wide average.
Particularly notable is where those retirement savings contributions are going. More than 70% have all their 401(k) money in a single target-date fund, a higher share than any older generation. These funds automatically shift what’s in them as investors advance toward retirement, with more invested in stocks early on, then a switch to bonds and other assets with less risk as they get older.
Why Many Millennials Are Playing Catch-Up
Timing worked against many millennials from the start. The oldest millennials entered the job market in the early 2000s, then faced the Great Recession, when joblessness among young workers climbed to roughly 15%.
Those who kept their jobs didn’t escape unscathed as wage growth stayed sluggish for years. That left many with more pressing needs than a retirement decades off.
Millennials also entered the workforce with significant student debt, and many spent their early years paying it down rather than funding a 401(k). According to Experian, millennials had an average student loan balance of $33,000 in 2025.
Like other generations, millennials are borrowing against their 401(k) balances to pay bills or cover emergencies. About one in five has an outstanding 401(k) loan, slightly above the all-worker rate.
Ways To Boost Your 401(k) Balance
If your balance is trailing the levels you want it to be, a few moves can close the gap without straining your budget.
Raise your contribution rate slowly: Bumping up what you save by just one percentage point isn’t a vast change in your paycheck, but when compounded over a career, it can add tens of thousands of dollars to a retirement balance.
Know your target: Fidelity recommends having three times your annual salary saved by 40 and six times your annual salary by 50.
Use every tax break and match available: Nearly one in five also contribute to Roth accounts at rates higher than Gen X and Boomers. A Roth account flips the usual tax setup: you contribute after-tax dollars now, and qualified withdrawals when you’re retired come out tax-free. That’s a good wager for younger savers to take—they’ll likely earn more later on, so paying taxes now saves them a bigger IRS tab later on.
Take the employer max: Don’t leave free money on the table. Common match formulas—50 cents on the dollar up to 6% of pay, or dollar-for-dollar up to 3%—deliver an instant 50% or 100% return on each dollar you contribute up to the cap, something no other investment can promise.
Read the original article on Investopedia
