On average, 401(k) returns typically fall between 5% and 8% annually, depending on your portfolio mix, fees, and whether you’re capturing your full employer match. Annual Return Tax Benefits Flexibility 401(k) 5%-8% Pre-tax, tax-deferred Limited until age 59½ Roth IRA 5%-8% Post-tax, tax-free growth Withdraw contributions anytime Traditional IRA 5%-8% Pre-tax, tax-deferred Similar to 401(k) Taxable Account Varies None Full access anytime S&P 500 Index (Avg) 10.3% (2003-2023) None Full access anytime What is the average rate of return on a 401(k) Typically between 5% and 8%, though long-term stock market returns are closer to 10%.