Updated

Updated · FinanceBuzz · Sep 3

Empower Puts Average 401(k) for Americans in Their 60s at $582,546 as Median Trails at $191,372

Updated

Updated · FinanceBuzz · Sep 3

Empower Puts Average 401(k) for Americans in Their 60s at $582,546 as Median Trails at $191,372

Q: Why might retiring during a market dip permanently destroy your life savings despite decades of careful planning?

Retiring in a market dip can permanently damage a nest egg because losses and withdrawals hit at the same time, a problem known as sequence-of-returns risk. Once retirement begins, people are no longer adding money; they are taking it out to pay bills. If markets fall early, retirees must sell more shares at depressed prices, leaving fewer assets to recover when markets rebound. That is why the order of returns matters more than the long-term average. Two retirees can earn the same average return over 20 or 30 years and end up with very different outcomes if one suffers losses in the first few years while the other gets gains early. A 20% drop requires a 25% gain just to break even, and withdrawals during that slump deepen the hole. This danger is highest in the “retirement red zone,” generally the five years before retirement through the first five to 10 years after. It is also why a headline 401(k) balance, even one near the average for people in their 60s, may not be enough if spending is high, health costs rise, or withdrawals are too aggressive. A portfolio may need to last 15 to 25 years or more. Experts say the main defenses are practical: keep one to three years of essential spending in cash or near-cash, rely more on steady income sources such as Social Security or pensions, diversify, use flexible withdrawals rather than rigid ones, and if needed delay retirement or work part time to avoid selling into a downturn.

2 articles · Updated · FinanceBuzz · Sep 3

$582,546 is the average 401(k) balance for Americans in their 60s, while the median is far lower at $191,372, underscoring how a smaller group of large accounts skews the headline figure.
Empower’s age breakdown shows balances typically peak in the 50s at $642,696 on average, then fall to $439,604 by the 70s as retirees shift from saving to early withdrawals.
$351,242 is the average across all age groups, but the report says retirement readiness at 67 depends less on a single benchmark than on spending, debt, health-care costs and withdrawal strategy.
15 to 25 years is the typical period those savings may need to cover, leaving inflation, market declines early in retirement and overly aggressive withdrawals as key risks to making balances last.