Updated

Updated · FinanceBuzz · Jun 10

Empower Puts Average 401(k) Balance for People in Their 50s at $629,000 as Median Hits $246,554

Updated

Updated · FinanceBuzz · Jun 10

Empower Puts Average 401(k) Balance for People in Their 50s at $629,000 as Median Hits $246,554

Q: Beyond a 401(k), what underused account offers triple tax advantages and could be key to a secure financial future?

The underused account is a Health Savings Account, or HSA. An HSA is often described as having a rare “triple tax advantage”: contributions are tax-deductible or made pre-tax through payroll, the money can be invested and grow tax-free, and withdrawals are tax-free when used for qualified medical expenses. That makes it more tax-efficient than many other savings vehicles. It can be especially valuable for retirement because health care is one of the biggest expenses later in life. Unlike a flexible spending account, HSA money rolls over year to year and stays with you if you change jobs. If you can afford to pay current medical bills out of pocket, many advisers recommend leaving HSA funds invested so they can compound over time, while saving receipts for possible tax-free reimbursement later. After age 65, an HSA also becomes more flexible. You can still withdraw money tax-free for qualified medical costs, but you can also use it for nonmedical expenses without the usual penalty, though those withdrawals are taxed as ordinary income. In that sense, it can function as a backup retirement account alongside a 401(k). To qualify, you generally must be enrolled in a high-deductible health plan and not be on Medicare. For 2026, contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up contribution for people 55 and older.

2 articles · Updated · FinanceBuzz · Jun 10

Empower said people in their 50s hold an average 401(k) balance of $629,000, while the median balance is far lower at $246,554.
That gap shows how high-balance savers skew the average, making the median a better gauge of what a typical worker in that age group has accumulated.
Balances peak in the 50s in Empower’s age breakdown, rising from an average $116,872 in workers’ 20s before falling to $576,755 in the 60s as retirees begin drawing down savings.
For savers who feel behind, the report points to catch-up contributions of $8,000 for those 50 and older in 2026, rising to $11,250 for ages 60 to 63.