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But most people don't have that much saved for retirement. A 401(k) really only makes sense as a retirement savings plan, and not as a general savings account. While its good to have a baseline number to use for planning, 5% falls short when compared to historical returns from the S&P. Fund selection and minimizing fees is certainly one key component to helping boost the average rate of return on 401(k) plans. We indexed these values to 100, with a value of 100 reflecting the county with the highest percentage of the population covered by employer-sponsored health insurance. (Fidelity) Americans aged 3039 have an average 401k savings of $38,400. Illustration: Martin Tognola. window.dataLayer = window.dataLayer || []; Theres a 10% penalty for withdrawals before your 60th birthday (well, before you turn 59.5 but how many people celebrate that milestone), and thats on top of the regular income taxes you will have to pay. On the other hand, those closer to their golden years may want to protect the savings they already have. To grasp what you can expect from your 401(k) plan, you need to understand some key points. But most people don't have that much saved for retirement. The best year was +45.4%. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any users account by an Adviser or provide advice regarding specific investments. Do you have low-fee funds in your portfolio? There is more than one way to estimate a future rate of return for your retirement investmentssome simple, some not. When reviewing these and other documents, these are some of the fees you should look out for. e=2;e