We use the current total catch-up contribution (not including employer matching) limit of $24,000 and assume it grows with inflation over time. That extra $6,000 basically makes the calculation a no-brainer. Adjusted for inflation, the 100-year average return (including dividends) is 7.214%. )\\)","g"));return null!==b?b[0]:!1};a.prototype.disableAllAds=function(b){if(!b||p(b))this.all=!0,this.reasons.add("all_page")}; This assumes dividends are reinvested. In 2022, you can contribute a maximum of $20,500, or $27,000 if youre at least 50 years old. In 2020, the average 401(k) account balance was $129,157, an increase from 2019's $106,478 average, according to Vanguard data. It doesnt stop there, as Personal Capital can provide lower-cost alternatives for you to consider as investment options. Unfortunately, few believe 401(k) plans actually charge fees as a recent study shows that 67 percent of individuals dont believe there are fees in their 401(k) plan. If your employer promises to match all 401(k) contributions up to 5% of your income, and you contribute that amount (5% of your income) every month, your employer will match you dollar for dollar, every month. Vanguards 2022 How America Saves report says the average 401(k) balance for Vanguard participants in 2021 was $141,542, up 10% from the 2020 level. Note: When reaching the age of 70 the IRS requires that you begin taking Required Minimum Distributions (RMDs) from this type of retirement savings account whether or not you continue to work. To Save Pennies? That is an appallingly low number for those of us trying to work our way towards retirement. Find her on Twitter at. There is more than one way to estimate a future rate of return for your retirement investmentssome simple, some not. Just four years ago, the average rate of return on 401(k) planswas an abysmal -.4%. c){for(var d=[],e=2;e