Here’s how much the average American has in retirement savings by age (2024)
(NEXSTAR) – While many Americans want to retire comfortably, it’s a goal that may seem out of reach for some struggling to save due to the rising costs of housing and everyday expenses.
According to a recent AARP survey, about 1 in 4 U.S. adults aged 50 and older say they never expect to retire and 70% are concerned about prices increasing faster than their income.
For those who plan to stop working, determining the right amount of money to set aside can be tricky as several factors come into play, like your spending habits, lifestyle, and location.
A GoBankingRates study, for example, found that you’d need over $1.1 million to fund a 25-year retirement in Miami, Florida, compared to nearly $570,000 in McAllen, Texas – based on the annual cost of groceries, housing, utilities, transportation, and healthcare costs.
One way to benchmark your savings is to see how you compare with others in your age range, though, as Edwards Jones points out, it won’t “tell you how close you are to your goal.”
“The relevant data point isn’t what others your age have saved but how much money you need yourself. The answer depends almost entirely on you, your habits now and your plans for later,” the financial services firm noted on its website.
The average retirement savings account balance for all families is higher, at $333,940, since the wealthiest households tend to drive the average up. This also applies to individual account balances, as illustrated in the following table.
It says by age 30, you should aim to have the equivalent of one year’s salary saved. So, if your annual salary is $60,000, your 401(k) balance should ideally be $60,000.
Here’s the full guideline from Fidelity:
By age30:Save 1x your income
By age35: Save 2x your income
By age 40:Save 3x your income
By age 45: Save 4x your income
By age 50:Save 6x your income
By age 55: Save 7x your income
By age 60:Save 8x your income
By age 67: Save 10x your income
However, it’s important to remember that while this can be a useful tool, it’s not a mandate.
“These milestones are aspirational. You likely won’t meet all of them,” Fidelity explained on its website. “But they can serve as goalposts to help you make a plan to save enough to maintain your lifestyle in retirement.”
The Associated Press and Nexstar’s Addy Bink contributed to this story.
For people aged 35 and under, the median savings were $18,880, while this amount increased to $200,000 for those aged 65 to 74. At current rates, this means that older generations are living on a mere $10,000 per year in retirement based on these savings alone.
For people aged 35 and under, the median savings were $18,880, while this amount increased to $200,000 for those aged 65 to 74. At current rates, this means that older generations are living on a mere $10,000 per year in retirement based on these savings alone.
This number has been cited so often that investors may feel as if they're failing if they don't reach it. But that shouldn't be the case. In fact, statistically, just 10% of Americans have saved $1 million or more for retirement. Don't feel like a failure if your nest egg isn't quite up to the seven-figure level.
The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately: $60,000 in transaction accounts (including checking and savings)$127,000 in certificate of deposit (CD) accounts.
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000.
Each year, the financial services company Charles Schwab puts out a report on how Americans think about saving, spending, investing and being wealthy. Schwab's 2022 Modern Wealth Survey, which surveyed 1,000 Americans ages 21 to 75, revealed that it takes a net worth of $2.2 million to be considered wealthy.
By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.
Household wealth or net worth is the value of assets owned by every member of the household minus their debt. The terms are used interchangeably in this report. Assets include owned homes, vehicles, financial accounts, retirement accounts, stocks, bonds and mutual funds, and more.
According to the Bureau of Labor Statistics (BLS), the average income of someone 65 and older in 2021 was $55,335, and the average expenses were $52,141, or $4,345 per month.
With $300,000 planned for your use as a retiree, a retirement age of 50, and an anticipated life expectancy of 85 years, you need that money to last you 35 years. This should mean that your yearly income is around $8,571, and your monthly payment is around $714.
In terms of savings accounts specifically, you'll likely find different estimates from different sources. The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.
Key Statistics on Average Savings Account Balances
According to the Federal Reserve's 2022 Survey of Consumer Finances (SCF), Americans' average (mean) household savings account balance is $62,410. However, the median savings account balance of $8,000 might be a more accurate representation.
Introduction: My name is Velia Krajcik, I am a handsome, clean, lucky, gleaming, magnificent, proud, glorious person who loves writing and wants to share my knowledge and understanding with you.
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