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Retirement at 75: How Does Your 401(k) Stack Up?
Approaching your golden years or already enjoying them, it’s natural to wonder how your retirement savings compare to others in your age group. By 75, many are either fully retired or making final preparations, making this a crucial time to assess your financial well-being.
Let’s dive into the figures and explore what they mean for your financial stability as you navigate retirement.
The Average 401(k) Balance for 75-Year-Olds
According to retirement plan provider Empower, 401(k) account holders in their 70s show a median balance of $92,611 and a mean balance of $420,975. The significant difference between these two figures is often attributed to a small number of individuals with exceptionally large savings. For a more representative understanding, the median balance typically offers a clearer picture.
It’s important to note that balances often decrease for those in their 70s compared to their 60s. This is largely due to retirees beginning to draw from their accounts. The IRS, in fact, mandates “required minimum distributions” (RMDs) from 401(k)s starting at age 73, though these can be delayed if you’re still employed.
Below, we’ll examine strategies to help you preserve your nest egg at 75.
Understanding Required Minimum Distributions (RMDs)
For 401(k) plan owners aged 73 and older, annual withdrawals, known as RMDs, are mandatory. However, if you’re still working, you can postpone these withdrawals until the year you officially retire, unless you hold at least a 5% ownership stake in the company sponsoring your 401(k).
The specific amount you’re required to withdraw is determined by factors like your age, account balance, and life expectancy. Crucially, failing to take these distributions can lead to substantial penalties and significantly diminish your retirement savings.
Maximize Catch-Up Contributions
If you’re still in the workforce, take full advantage of “catch-up contributions.” For individuals over 50, you can contribute an additional $7,500 annually to your 401(k), on top of the standard $23,500 limit.
This means a 75-year-old still working could contribute a total of $31,000 to their 401(k) each year. These provisions are specifically designed to help those nearing retirement boost their savings.
Leverage Your Health Savings Account (HSA)
If you’ve maintained a Health Savings Account (HSA) from your working days, good news: it remains a valuable resource in retirement, particularly for covering medical expenses. Unlike 401(k)s or IRAs, HSAs are not subject to required minimum distributions at age 73. This allows your funds to grow tax-free for as long as you wish, ready for when you need them.
Note: The One Big Beautiful Bill Act, passed on July 4, 2025, prohibits individuals on Medicare from contributing to HSA accounts.
Reconsider Aggressive Investment Strategies
Whether you’re approaching retirement or already enjoying it, a general recommendation is to transition from higher-risk investments (like stocks) to more stable options (such as bonds). However, if your savings are lagging, a more aggressive investment approach might be worth considering. The optimal strategy is highly personal, so consulting with a qualified financial planner is always advisable.
Tap into Social Security
At age 75, you’re already eligible for the maximum Social Security benefit, which becomes available at age 70. There’s no additional financial advantage to delaying your claim past age 70, so if you haven’t yet, it’s time to claim your benefits. Social Security can provide a vital income stream, helping to offset withdrawals from your other retirement savings.
Explore Part-Time Work
If your 401(k) savings at 75 aren’t quite enough to support your desired lifestyle, consider supplementing your income with a part-time job or other side ventures. These can help bolster your retirement savings or provide extra funds for daily expenses. From traditional retail roles to flexible freelancing opportunities, there are many ways to protect and extend your savings.
Reduce Spending
For those concerned about their 401(k) balance dwindling in retirement, exploring ways to cut expenses is a smart move. Trimming non-essential costs, such as subscriptions or lavish vacations, and actively seeking better deals on insurance and medications, can significantly lighten your monthly budget. Many retirees even opt to relocate to areas with lower taxes or a reduced cost of living to make their savings go further.
The Bottom Line
At 75, you may be well into your retirement journey, but your financial situation isn’t set in stone. Whether your 401(k) balance is above or below the national average, the most critical factor is how you manage your resources moving forward. An honest assessment of your finances, expectations, and goals, combined with exploring your available options, is the best path to truly enjoying your golden years.
Money Tips That Can Work For Everyone
No matter your current bank account balance, there’s always room to optimize your financial well-being. Here’s a quick checklist of things you can look at today:
- Prioritize Debt Repayment: Debt can hinder your financial progress. Beyond cutting expenses, tools like balance transfer credit cards and debt counseling can help you pay off debt faster.
- Generate Extra Income: If finances are tight, earning some additional money can make a significant difference. A new full-time job is one option, but for those not ready for a big change or already retired, a part-time side hustle could be a better fit.
- Cut Your Expenses: While it might sound daunting, reducing expenses doesn’t have to be painful. Focus on your biggest expenditures, as these typically offer the most significant savings.
For example, with auto insurance rates on the rise, shopping around for a new provider could be the quickest way to lower your bill. For upcoming vacations, the right travel credit card might help offset costs.