“If you remember Woodstock, you weren’t there.”
August 15 marked the 50th anniversary of the landmark music and arts festival in upstate New York, and of course, we found a way to make it about 401ks.
It’s not that big of a stretch. The vast majority of Woodstock’s 400,000ish attendees (who avoided the brown acid) are now retired and in their 70s—an age group that includes early 401k adopters.
While the 401k was officially “born” when Congress passed the Revenue Act of 1978, it wasn’t until the IRS issued rules in 1981 allowing employees to contribute to their 401k plan through salary deductions that the widespread rollout of 401k plans began.
A 20-year-old who attended Woodstock in 1969 was 32 in 1981, and aware and ready to start saving for retirement in earnest. Now that the 20-year-old attendee is 70, let’s hope he or she spent the better part of the past 38 years contributing to a 401k.
How would (or should) those now between the ages of 70 and 79 have fared? Take a look:
- $182,100: Average 401k balance for those 70 and older at Fidelity Investments. The median balance for this age group is $51,900.
- $192,877: Average 401k balance for participants ages 65+ according to Vanguard’s 2019 How America Saves survey. The median balance for this age group is $58,035. The survey notes that balances for those over 65 are frequently being drawn down by participants who are already retired.
- $185,105: Average “Strict Retirement Savings” by Age in the U.S. for ages 70-74 (including 401ks, IRAs, 403bs and pensions), per Aug. 2019 analysis by the website DQYDJ. Using the “Expansive” definition, which includes savings accounts, stocks, bonds and other investments which could be sold and spent in retirement, the figure jumps to $433,614.
- $145,742: Average “Strict Retirement Savings” by Age in the U.S. for ages 75-79; or $424,037 using the “Expansive” definition.
- $225,390: Average net worth (including home equity) of Americans ages 70-74. Take away the home equity, and the average net worth for this age group falls to $68,716, according to a WalletHacks May 2019 analysis of U.S. census data. The figure is $197,758 for those 75 and older ($46,936 without home equity).
While general guidelines say a 70-year-old should have at least eight times their annual salary saved for retirement ($320,000 for someone who earned $40,000 per year or $640,000 for someone who earned $80,000 per year), survey after survey tells us the vast majority of people fall far short of that benchmark.
The Woodstock 50th anniversary concert originally planned was scrapped due to numerous organizational issues, yet many people are returning to the site this week as the Bethel Woods Center for the Arts is hosting a series of events Aug. 15-18 at the 1969 concert site, 80 miles northwest of New York City.
Original Woodstock veterans Arlo Guthrie, Creedence Clearwater Revival’s John Fogerty and Carlos Santana are among those scheduled to perform.
- SEE ALSO: 50 Facts about Woodstock at 50