Residents of these Massachusetts towns have the best 401(k) benefits

According to a new report by SmartAsset.

According to SmartAsset, Boston is the No.5 best city in Massachusetts for 401(k) benefit plans.
According to SmartAsset, Boston is the No. 5 best city in Massachusetts for 401(k) benefit plans. –(David L Ryan/Globe Staff Photo)

If you live in Waltham, there’s a good chance you’re more prepared to retire than the rest of us, according to a new report by SmartAsset.

The personal finance technology company tapped U.S. Department of Labor data to rank which communities have the best 401(k) benefit plans on average. Within Massachusetts, SmartAssest found that Waltham, Kingston, and Woburn residents have the best 401(k) plans. Waltham ranked No. 26 in the country.

To create the rankings, SmartAsset looked at three factors: employer contributions, investment performance and administrative fees.

To determine the overall employer contribution percentage, SmartAsset divided the sum of employer 401(k) plan contributions by the sum of total 401(k) plan contributions.  Then, it indexed the ratio to 100, with a score of 100 representing the highest employer contribution percentage. The index reflects how generous companies are when contributing to employee 401(k) plans.

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The investment performance index was created by calculating annual earnings on investments as a percentage of average total assets, and an administrative fee index was generated by calculating annual administrative fees as a percentage of average total assets. Both of these values were indexed to 100.

A weighted average of the three factors yielded an overall score out of 100.

Waltham took the top spot in Massachusetts with a score of 88.70. After Kingston and Woburn came Spencer, Boston, with a score of 80.66, and Marlborough. Belmont, Cambridge, Ware, and Milton rounded out the top 10 cities, respectively.

Most Americans are vastly unprepared for retirement, however.

A recent analysis by the Economic Policy Institute that looked at 401(k)s, IRAs, and other retirement savings accounts found that the average American family has just $5,000 in retirement savings — not enough to retire comfortably.

While families headed by people between the ages of 55 and 61 were found to have a median amount of retirement savings of $17,000, the EPI found that Hispanic and African American families have a median savings of $0 because most of these families have no retirement savings at all.

Read the full SmartAsset report here.