Age 32-37

Average retirement balance: $32,602

What clients can do: Automate contributions through paycheck deductions and allow auto-escalation so contributions increase every year.

(Photo: Shutterstock)

Age 38-43

Average retirement balance: $61,933

What clients can do: Maximize any employer match. At this age, other expenses and pressures may be prevalent, but this is a great way to build a 401(k) with easy money. For example, if an employer will match up to 6% of a client’s contribution, encourage the client to put in 6%.

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Age 44-49

Average retirement balance: $113,370

What clients can do: Capitalize on an unexpected bonus or raise. Yes, the client’s plan might be to use the extra cash for home renovations or other options, but putting at least part of it toward the 401(k) can help these savings. Further, the average American reaches their peak earning potential between ages 44 and 55.

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Age 50-55

Average retirement balance: $133,626

What clients can do: Make catch-up contributions. As every advisor knows, once a client hits 50, the Internal Revenue Service allows them to make 401(k) contributions above the standard limit. In 2020, the annual contribution limit for a 401(k) is $19,500. However, clients over 50 can contribute an additional $6,500, thus $25,000 total. That is a key way to boost savings before retirement.

(Photo: Shutterstock)

Only 44% of Americans say they are on track or ahead of schedule for retirement savings, according to a recent national financial stress survey conducted by John Hancock. As 401(k)s are an important part of the fabric of retirement savings, it’s key that clients understand the savings level they should be at what age.

The survey of 3,500 workers found that 51% of the participants were behind schedule with retirement savings and 35% were on track, while only 9% were ahead of schedule.

Only 12% of millennials or Gen Z-ers use financial advisors, rising to 21% of Gen Xers and 36% of baby boomers. However, 46% stated they used their own discretion when choosing investments and as many as 23% didn’t pay attention to their retirement savings.

In addition, almost half of workers said they would be more productive if they weren’t so worried about personal finances, and 31% of generations X, Y and Z have no emergency savings.

A review of overall savings should be done twice a year, the report recommends. But a good start is to provide clients the national average of 401(k) savings, gauge where they are and make adjustments from there.

Advisors can help clients understand where they should be in their savings plans and how to get there, which can help alleviate financial stress. In the gallery above are the average account balances by age group and what clients can do to at least attain those levels, according to John Hancock.

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