In a recent LinkedIn post, Ryan Gomez, CFP® discusses the significant gap between average 401(k) balances and the actual amount individuals need to fund a comfortable retirement. Gomez, a Certified Financial Planner, highlights that the commonly cited average 401(k) balance is insufficient for most people’s long-term financial security.
The Reality of Retirement Needs
Gomez challenges the notion that average retirement savings are adequate, asserting that they are “way too low.” He provides a practical method for individuals to calculate their own retirement needs. The core of his calculation involves dividing the desired annual retirement income by a 4% withdrawal rate, a common guideline for sustainable retirement spending. However, he stresses the critical importance of adjusting this figure for inflation over the projected duration of retirement.
To illustrate this point, Gomez walks through an example: an individual needing $150,000 in annual income. After accounting for 3% inflation over a 30-year retirement, this figure balloons to $365,000. Dividing this adjusted income by the 4% withdrawal rate, Gomez arrives at a target savings goal of $9,135,000.
“Average 401k balance is $326,459. Way too low, here’s how much you really need…”
Analyzing Average Savings by Age
The financial planner then contrasts these calculated needs with the average 401(k) savings reported for different age groups. The figures presented show:
- 20s: $107,171
- 30s: $211,257
- 40s: $419,948
- 50s: $635,320
- 60s: $577,454
Gomez points out the stark disparity, noting that even the average savings for those in their 60s, at $635,320, would only support an annual withdrawal of approximately $24,500 based on the 4% rule. “I don’t know about you, but that’s not nearly enough for most people to live on,” he states, underscoring the financial precariousness faced by many nearing or in retirement.
Strategies for Reaching Retirement Goals
Beyond highlighting the problem, Gomez offers actionable advice for individuals aiming to build a more robust retirement nest egg. He emphasizes several key strategies:
Prioritizing Tax-Advantaged Accounts
Gomez advises readers to prioritize maxing out tax-advantaged accounts first, suggesting this is a foundational step in efficient retirement saving.
Consistent Contributions
He underscores the importance of maintaining consistent contributions, even during periods of market volatility. “Consistent contributions even when markets tank” is a crucial element for long-term growth, according to his post.
The Power of Starting Early
The principle of compound interest is presented as a powerful ally. As Gomez notes, “Starting early (Compound interest is your best friend).” This highlights the significant advantage younger individuals have in accumulating wealth over time.
Personalized Planning is Key
Ultimately, Gomez advocates for a proactive and personalized approach to retirement planning. He encourages individuals to “Run the math, build a plan, and adjust as life changes.” Recognizing that retirement needs are highly individual, he strongly recommends consulting with a financial professional.
“Every situation is different so make sure you’re running the numbers with your CFP for YOUR situation.”
His concluding remark reinforces this message: “Your future self will thank you.” Through his post, Ryan Gomez, CFP® aims to empower individuals with the knowledge and motivation to take control of their retirement savings and build a secure financial future.
📝 About This Content
This article is based on insights shared by Ryan Gomez, CFP® on LinkedIn.
📅 Originally posted on September 14, 2026 | View original post on LinkedIn →