Are You Keeping Up with the Retirement Savings Norm?
Curious about how your retirement savings stack up against the broader landscape? It's a natural inclination to assess your financial standing among your peers, even though figuring out your unique retirement needs is an intensely personal journey.
The Recommended Savings Rule
Financial advisors often suggest saving between 10% to 15% of your earnings for retirement. Yet, we know that for many, this can feel like an uphill battle. While it’s beneficial to see where you fit within the average and median savings for different age groups, remember that these figures are just a slice of the larger financial picture.
Current Savings Averages in America
As reported in the 2022 Survey of Consumer Finances, the average retirement savings for U.S. families stands at $333,940, while the median savings is much lower at $87,000.
Understanding the Broader Picture
These figures alone may not provide a clear indication of your retirement readiness. Not everyone of the same age will retire simultaneously, and numerous factors influence savings: job income, intended retirement lifestyle, anticipated retirement age, life expectancy, and even social disparities. The same survey reveals that 61.8% of White, non-Hispanic families have retirement accounts, in stark contrast to 34.8% of Black households and 27.5% of Hispanic families.
Growing Your Nest Egg Over Time
As people age, their retirement savings generally tend to rise, largely due to increased earnings, the benefits of compound interest, and more. If you're seeking more personalized retirement guidance, our helpful calculators can guide you:
Tools for Retirement Planning
Use these calculators to estimate how much you'll need for retirement, forecast your savings balance based on yearly contributions, and project your total based on monthly contributions along with employer matches.
Your Retirement Savings: Age Breakdown
Here's a summary of average retirement savings by age group:
- Under 35: $49,130
- Age 35-44: $141,520
- Age 45-54: $313,220
- Age 55-64: $537,560
- Age 65-74: $609,230
- Age 75 and older: $462,410
The Value of Median Savings
To better understand retirement savings without the skew of extreme cases, we also look at median savings figures:
- Under 35: $18,880
- Age 35-44: $45,000
- Age 45-54: $115,000
- Age 55-64: $185,000
- Age 65-74: $200,000
- Age 75 and older: $130,000
Insights into Young Investors
Nearly half of families led by individuals under 35 have retirement accounts like IRAs and employer-sponsored plans like 403(b)s, with average and median values reflecting $49,130 and $18,880, respectively.
Motivational Milestones
Moving into the next age group (35-44 years), the likelihood of holding retirement accounts increases significantly, with an impressive 62% reporting they have a nest egg set aside.
The Weight of Retirement Preparedness
As you approach retirement age, the stakes become higher. For those aged 55-64, the average savings are notable at $537,560, but planning is vital as you near Social Security eligibility when around 57% have active accounts.
Entering Retirement
For individuals 65 and up, average savings taper off but still sit at a respectable $462,410, albeit in conjunction with a declining percentage of retirement account holders, signaling that preparation is crucial at all life stages.
Strategies to Boost Your Savings
For those aged 50 and older, there are distinct advantages available that can help elevate your retirement savings. According to a recent AARP survey, a significant portion of individuals are uncertain whether their savings will suffice, highlighting the need for proactive engagement with retirement planning.
