In 2026, 401(k) balances are expected to rise thanks to higher IRS contribution limits and generally favorable market conditions over the past few years. The challenge with retirement benchmarks is that “average” balances can paint a misleading picture of where typical middle-class savers actually stand.
When wealthy investors with million-dollar accounts are factored into the average, the numbers skew upward dramatically. This creates an illusion that middle-class workers are doing better than they actually are. The median balance, which represents the midpoint where half of savers have more and half have less, often tells a more honest story about where the typical American really stands.
| Age Group | Average Balance | Median Balance (The “Typical” Person) |
|---|---|---|
| 20s | $107,171 | $40,050 |
| 30s | $211,257 | $81,441 |
| 40s | $419,948 | $164,580 |
| 50s | $635,320 | $253,454 |
| 60s | $577,454 | $186,902 |
Note: The dip in average balances for those in their 60s reflects individuals beginning to withdraw funds or rolling over 401(k)s into IRAs. Source: Empower.com
1. Why Averages Are Misleading for Middle-Class Savers
According to Fidelity’s Q3 2025 data, the average 401(k) balance across all ages hit $144,400. That sounds encouraging until you dig deeper. The problem is that high earners with substantial balances pull that average upward, while millions of middle-class workers struggle to save even a fraction of that amount.
The median tells the real story. When you look at the typical saver rather than the mathematical average, balances drop significantly. This gap between average and median reveals the uncomfortable truth: wealth inequality extends into retirement savings, and most middle-class workers are further behind than the headlines suggest.
2. The Fidelity Salary Multiple Benchmark
Rather than comparing yourself to neighbors or national averages, financial experts suggest using salary multiples to gauge whether you’re on track. Fidelity has established clear benchmarks based on multiples of your annual income.
| Age | Recommended Savings (Multiple of Salary) | Example: $75,000 Salary |
|---|---|---|
| Age 30 | 1x annual salary | $75,000 |
| Age 40 | 3x annual salary | $225,000 |
| Age 50 | 6x annual salary | $450,000 |
| Age 60 | 8x annual salary | $600,000 |
| Age 67 | 10x annual salary | $750,000 |
By age 30, you should have saved one times your annual salary. By 40, that target jumps to three times your salary. When you reach 50, the goal is six times your annual salary. By 60, you should have accumulated eight times your salary. And by retirement at age 67, Fidelity recommends having 10 times your annual salary saved.
These multiples provide a more personalized measure than comparing yourself to strangers. A software engineer earning $120,000 needs different savings than a teacher making $55,000. The salary multiple approach accounts for your individual circumstances.
The harsh reality is that most middle-class Americans fall well short of these targets. By the time workers reach their 50s, the gap between where they should be and where they actually are becomes painfully apparent.
3. Warning Signs You’re Falling Behind
The first red flag is failing to capture your full employer match. If you’re not contributing enough to get every dollar your company offers, you’re leaving free money on the table. This is the easiest return on investment capital you’ll ever have, yet roughly one in four workers misses out on it.
The second warning sign is a savings rate below 15% of your gross income. Fidelity recommends saving 15% annually, including any employer contributions. If you’re contributing 5% and your employer matches 3%, you’re only at 8%. That’s barely half of what you need to retire comfortably.
The third signal is when your total retirement balance falls below your annual salary after age 35. By your mid-30s, your nest egg should have surpassed your yearly income. If it hasn’t, you’re significantly behind the curve and need to make aggressive changes.
4. The 2026 Contribution Opportunity
The IRS has increased contribution limits for 2026, giving savers a chance to catch up. For workers under 50, the standard contribution limit is $24,500. That’s an increase of $1,000 from 2025’s limit of $23,500.
Workers aged 50 and older can contribute an additional $8,000 in catch-up contributions. This brings their total allowable contribution to $32,500 for 2026. This is a significant jump from the $31,000 total available in 2025.
The most dramatic change affects workers aged 60 to 63. Thanks to the SECURE 2.0 legislation, this age group gets a “super catch-up” contribution of $11,250 instead of the standard $8,000. That brings their total possible contribution to $35,750 annually. This provision recognizes that many workers in their early 60s had lean earning years earlier in their careers when they couldn’t save aggressively.
These higher limits create real opportunity, but only if you have the income and discipline to use them. Maxing out a 401(k) at $24,500 annually requires significant sacrifice for middle-class earners. For someone making $75,000, that represents nearly 33% of gross income before any employer match.
5. Why Most Middle-Class Savers Can’t Max Out
The uncomfortable truth is that maxing out a 401(k) remains financially out of reach for most middle-class families. After accounting for taxes, housing costs, insurance, food, transportation, and basic living expenses, there isn’t enough left over to contribute $24,500 annually.
A family earning $100,000 might bring home $75,000 after taxes. If they contribute the maximum $24,500, they’re trying to live on $50,500. In most American cities, that’s barely enough to cover rent, utilities, groceries, and car payments, leaving nothing for healthcare, emergencies, or children’s expenses.
This is why the salary multiple approach makes more sense than aiming for maximum contributions. Focus on hitting that 15% savings rate consistently, capture your full employer match, and build from there. A worker earning $70,000 who saves 15% ($10,500) plus gets a 5% match ($3,500) is contributing $14,000 annually. That won’t max out the IRS limit, but it puts them on track for a sustainable retirement.
The key is consistency over decades, not heroic contributions for a few years. Time and compound growth do more for your wealth than any single year’s contribution ever could.
6. The Behavioral Reality of Retirement Saving
Financial experts love to publish ideal scenarios showing what you could accumulate by maxing out your 401(k) from age 25 to 65. The math works beautifully on spreadsheets. Real life works differently.
Most people switch jobs multiple times throughout their careers, sometimes taking breaks from retirement contributions during transitions. Many face periods of unemployment, salary cuts, or family emergencies that force them to reduce or pause their savings. Others have student loans, medical debt, or family obligations that compete for their dollars.
The middle-class experience of retirement saving is messy and inconsistent. You save aggressively for a few years, then life happens, and you scale back. You get a raise and bump your contribution rate, then your car dies, and you need the cash. This is normal, not a moral failing.
The goal isn’t perfection. The goal is to maintain forward momentum over time, hitting that 15% savings rate as often as possible while always capturing the employer match. Every dollar you save in your 30s will likely be worth more than three dollars saved in your 50s, thanks to compound growth.
Conclusion
The 2026 increases in contribution limits create opportunity, but they don’t change the fundamental challenge facing middle-class savers. Most workers can’t max out their 401(k)s and likely never will. That doesn’t mean retirement is impossible.
Focus on the controllable factors: capture your full employer match, aim for a 15% total savings rate, and use Fidelity’s salary multiples to track your progress—a 35-year-old earning $65,000 should aim to save $65,000 to $97,500. By 50, that same worker (now hopefully earning more) should have accumulated six times their current salary.
If you’re behind, use the 2026 catch-up provisions to close the gap. If you’re ahead, maintain your discipline. The middle class can build wealth through consistent, sustained retirement savings, but it requires a long-term perspective and realistic expectations about what’s achievable given real-world constraints.