A rising stock market gave retirement accounts a lift last quarter. Fidelity reports the average 401(k) balance jumped 10.5% between March and June, the biggest quarterly rise since 2020. By age group, participants in their 30s average $75,200, and those in their 40s average $156,800.
Saving rates are strong too. Counting employer contributions, people are investing 14.4% of pay on average, just shy of Fidelity's 15% target. Fidelity also notes that more than 8 in 10 participants are putting in enough to collect their full employer match, which is money a company contributes based on what an employee adds, up to a preset cap.
"A 401(k) is a fantastic retirement savings tool for a lot of reasons. I'd generally rank it as one of the more high-priority retirement savings options out there, especially when a match is provided," said Kevan Melchiorre, a CFP who co-founded Tenet Wealth Partners.
According to Fidelity's milestones, aim to have roughly one year of salary set aside at 30, and around three times your pay by 40. Those benchmarks cover all your retirement savings, not just a 401(k), and are designed to put you on track toward roughly 10 times your income by age 67, which the firm says can support your lifestyle in retirement.
While a 401(k) often anchors the strategy, most people pair it with other vehicles such as IRAs, brokerage accounts held in a taxable account, and health savings accounts. Melchiorre's rule of thumb is to aim for at least 15% of your income going to retirement across all accounts, including what your employer adds to your 401(k).
There are structural perks too. In 2026, the 401(k) contribution limit is set at $24,500, compared with $7,500 total across traditional and Roth IRAs. On top of that, many employers chip in with matching contributions.
Zooming out beyond one account gives a clearer picture. At Avance Private Wealth Management, Adam Vega serves as a CFP and managing partner, and he recommends centering on your net worth - assets such as a home, investments, and savings minus liabilities, which can include obligations like a mortgage or student loans. He suggests that by age 40, a reasonable target is net worth of roughly two to three times annual income, with the important part being that the figure keeps trending upward.
"Someone who has built substantial home equity and paid down debt may have a much stronger financial position than their 401(k) balance alone suggests," says Vega. These are guideposts, not rules. Ultimately, the amount you'll require hinges on your retirement timing and how much you anticipate spending.
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Catching up is still very possible. Many people in their 40s have more than two decades for investments to grow. Starting earlier helps because compounding works longer, but starting now still matters.
Consider a simple illustration at a 7% annual return. If a 22-year-old invests $250 a month, they could have about $953,680 by age 67. A 40-year-old investing the same $250 a month would end up around $240,672 by 67, roughly one quarter as much.
To approach $954,000 by age 67, a 40-year-old would have to put in roughly $990 each month. That is a big jump, but your 40s can also be when other bills fall away, and Vega notes that freed-up cash can sometimes be redirected to retirement.
"The biggest mistake is assuming it's too late and getting discouraged to start," Melchiorre says. Contribute what you can and build from there over time.
Bottom line for your money: balances move with markets, but steady saving, grabbing the full employer match and looking at your whole financial picture are what make the real difference.
