Dictionary of Financial Terms
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Account balance
An account balance is the amount of money in a financial account.

For example, a savings account balance is the amount of money in the savings account.

An account balance may also refer to the amount of money outstanding on a loan, line of credit, or credit card.

Your credit card balance, for example, is the amount of money you owe a credit card company.

With your 401(k), your account balance, also called your accrued benefit, is the amount your 401(k) account is worth on a date that it's valued. For example, if the value of your account on December 31 is $250,000, that's your account balance.

You use your 401(k) account balance to figure how much you must withdraw from your plan each year, once you start taking required distributions after you turn 70 1/2.

Specifically, you divide the account balance at the end of your plan's fiscal year by a divisor based on your life expectancy to determine the amount you must take during the next fiscal year.