How Much Money Should You Have in Your 401(k) by Age 50?

At age 50, retirement isn't just some goal in the distant future anymore. It's probably going to happen within the next 15 to 20 years. That makes it more important than ever to check that you're on track with your investment accounts -- and to make adjustments if necessary.

But how do you know if you're on track for retirement? While this depends on your salary and cost of living, there are simple guidelines for how much you should have in your 401(k) and other retirement accounts.

Here's how much to have in your 401(k) at age 50

Fidelity, one of the largest brokerage firms, has some widely used retirement savings recommendations. By age 50, you should have six-times your salary in retirement savings. For example, if you make $70,000 per year, you'll ideally have $420,000 in retirement savings at 50.

That can include money in your 401(k), individual retirement accounts (IRAs), and any other retirement savings you have. If you have $350,000 in your 401(k) and $70,000 in your IRAs, you'd meet Fidelity's recommendation.

With this much saved, you'll be on track to replace 45% of your pre-retirement income for a 26-year retirement, from ages 67 to 93. Social Security benefits replace about 40% of pre-retirement earnings on average. Between Social Security and your retirement savings, you'll be at about 85% of your pre-retirement income, which is enough for the typical retiree.

If you want to save more for retirement, remember that a 401(k) isn't your only option. To reach your retirement goals faster while saving on taxes, consider opening an IRA or a Roth IRA. E*TRADE offers both of these and an easy-to-use investing platform. Click here to learn more and open an account today.

Most Americans don't have this much saved

Six-times your salary is a lot of money. It's worth clarifying that this is far from the norm. Americans between the ages of 45 and 54 have a median retirement savings of $115,000, according to Federal Reserve data. Their median household income is $91,880.

You don't need to feel bad if you're behind with your retirement savings. Many other people are in the same situation.

At the same time, this can have serious consequences later in life. People who don't save enough often find themselves forced to work longer than they'd like or living on a tight budget in retirement. If your retirement savings isn't where you'd like it to be right now, you need to take steps to fix this over the rest of your working years.

How to catch up if you're behind on your retirement savings

The best way to catch up with retirement savings is to contribute as much as you can toward your retirement accounts. The 401(k) contribution limit in 2024 is $23,000, plus $7,500 in catch-up contributions for those 50 and older. The IRA limit is $7,000, plus $1,000 in catch-up contributions for those 50 and older.

If you're now in your 50s, you have the opportunity to max out your contributions and rapidly grow your retirement accounts. Even if you can't contribute the maximum, every $1 counts. 

Here's how to free up more money to put toward your retirement savings:

• Make the most of your earning potential. You're likely in your peak earning years. Be proactive about looking for raises, promotions, and higher-paying jobs. Don't leave any money on the table.
• Look for ways to reduce your big expenses. Expenses tend to rise as we get older. Try to find at least one or two places to cut back. For example, groceries are one of the most common areas where people overspend. It's often easy to save by making a grocery budget for yourself.
• Avoid credit card debt. This is high-interest debt, and it ties up money every month that you could be putting toward retirement. If you have any credit card debt, focus on paying it off as quickly as possible. If you don't, great! Keep paying your credit cards in full to avoid it in the future.

Even at 50, there are still ways to increase your savings so you can have a more comfortable retirement. Last but not least, you could also work a few more years than you originally planned. If you enjoy your job and are healthy enough, this is a good option to boost your retirement savings before you call it quits.