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Average Retirement Savings

If you’re wondering what’s a normal amount of retirement savings, you’re probably one of the 60% of Americans who either don’t think their savings are on track or aren’t sure, according to the Federal Reserve’s “Report on the Economic Well-Being of U.S. Households in 2019.” Among all adults, median retirement savings are $65,000, according to the Federal Reserve’s most recent data. The Federal Reserve also estimated that by retirement, that number would grow to an average of $255,200.

Of course, these figures reflect the situation of people who have retirement accounts, though about a quarter of Americans don’t. For those who do, 54% have employer-sponsored accounts and 48% having savings in non-retirement accounts. A smaller percentage (21%) have pensions.

As you get closer to retirement, you tend to save more and invest conservatively. So knowing how your retirement savings compares to your peers can be helpful. A financial advisor can help you manage your retirement savings and plan for the future.

Average Retirement Savings by Age

First, it can’t be stressed enough that too many of us aren’t even saving for retirement. According to the Federal Reserve, one in four Americans have no retirement savings. Taking them and people who aren’t saving enough into account, the Employee Benefit Research Institute estimated the retirement savings deficit to be $3.68 trillion in early 2020. That means all U.S. households (with a head of household between the ages of 25 and 64) have a total $3.68 trillion less in savings than they should have for retirement.

As we stated earlier, research by the Federal Reserve found that the median retirement account balance in the U.S. – looking only at those who have retirement accounts – was just $65,000 in 2019 (the survey is conducted every three years). The conditional mean balance was $255,200.

A June 2022 study by Vanguard called “How America Saves 2022” calculated average and median retirement account balances of Vanguard account holders by age. Here’s how the numbers break out:

Vanguard Retirement Account Balances by Age
Age Bracket Average Balance Median Balance
25 and younger $6,264 $1,786
25 – 34 $37,211 $14,068
35 – 44 $97,020 $36,117
45 – 54 $179,200 $61,530
55 – 64 $256,244 $89,716
65 and older $279,997 $87,725

What Is the Median Household Net Worth?

It isn’t just retirement accounts that Americans lack. Looking at overall net worth tells a similar story, although these figures have been consistently rising since the Great Recession.

In the Federal Reserve’s latest Survey of Consumer Finances (SCF) report, the median household net worth for a head of household age 35-44 years old is $91,300. For a head of household age 45 to 54 years old, that figure is $168,600. In the 55-64 age range, average net worth is $212,500. Including all age groups median net worth rose 18% from the 2016 survey to $121,700.

Why Social Security Benefits Alone Won’t Be Enough to Retire On

For many Americans, Social Security benefits are the only source of income during their retirement. Social Security was never meant to be the sole source of retirement income, though. Retired workers average a monthly Social Security benefit of $1,624 as of July 2022. Add the rising debt levels among older Americans and you have a situation that’s a far cry from most people’s’ retirement dream of travel and leisure.

America’s Retirement Savings Gap

Average Retirement Savings

America has a retirement savings gap to match our income gap. People with higher incomes are more likely to have retirement savings and their average retirement savings are higher, too. Meanwhile people with the lowest incomes have no savings and plenty of debt. That shouldn’t come as a huge surprise, but it’s one of the most notable features of the retirement landscape.

It may be counter-intuitive but those near the top can still have big retirement savings gaps. Think of a high-earning family with an expensive mortgage and kids in private school. They may not save much for retirement, and their high standard of living means there would be a big gap between the income they’re used to and the retirement income they’ve saved.

Think lower-income folks can simply work longer and retire later to make up for their lack of savings? Not so fast. Americans with lower incomes may be the ones least able to work into their late 60s and 70s, either because their work is too physically demanding or their employers won’t want to keep them on. It’s a good idea even for white-collar workers not to count on working later as a substitute for retirement planning.

Where Your Retirement Savings Stand

Experts generally think of retirement savings as an end goal with a series of mileposts along the way. Some say that you should have saved the equivalent of one year’s salary by the time you hit 30. Saving more certainly won’t hurt, though.

By the time you retire, it can be a good idea to have between nine and 11 times your salary in retirement savings. These aren’t hard-and-fast rules, and experts disagree about how much to save by 30, 35, 40, 45, 50, 55, 60, 65 and beyond.

Conventional wisdom has been that saving between 10 and 15% of your salary each year will get you on your way to a comfortable retirement so long as you choose a low-fee investment vehicle that consistently earns inflation-beating returns. Talking to an expert can help you set and execute a retirement plan.

So why don’t Americans’ average retirement savings match up to what experts say we should have? There are two very good reasons. One is that our brains have a hard time giving up present reward for future reward, especially when that future is decades away. Saving is tough. We can’t picture ourselves choosing between food and prescription drugs in our old age. However, we can visualize what we’d do with our paychecks in the here and now.

The other reason for the retirement savings shortfall is if you don’t earn enough to save for retirement. Juggling necessary expenses, student loan payments, childcare and all the rest can leave us with nothing left for an IRA.

Bottom Line

Average Retirement Savings

When it comes to average retirement savings statistics in America, the picture is fairly grim. That means that keeping up with the Joneses in this respect just isn’t enough. Even above-average savings and a healthy Social Security benefit might not be enough to let you maintain your lifestyle in retirement.

Many Americans say they expect to work longer and retire later to get around the retirement savings gap. That’s one strategy but it isn’t a sure thing that you’ll be able to keep working into your 70s. The safer bet is to save as much as you can, as early as you can – and throughout your career.

Tips to Help You Save for Retirement

  • A financial advisor can help you build a long-term strategy for reaching retirement. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Social Security benefits alone won’t be able to support your current lifestyle. However, they can certainly help with your living expenses in retirement. Try our Social Security calculator to see how much of a benefit you can expect.
  • While you’re at it, check out our retirement calculator to see if your savings are on pace; and try our cost of living calculator to get a better idea of your income needs.

Photo credit: © iStock/jpa1999, © iStock/Vernon Wiley, © iStock/Squaredpixels

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia's work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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