What is the Average Retirement Savings by Age? How Long Will My Retirement Savings Last?

What is the Average Retirement Savings by Age?

The desire to gauge one's financial progress compared to peers is natural and can motivate further efforts or provide a sense of accomplishment. However, it's crucial to remember that the average retirement savings by age might not be the most comprehensive measure of retirement preparedness.

Retirement savings balance varies by age groups, according to the 2019 Survey of Consumer Finances. The median retirement savings for all families is $65,000. Here's a breakdown of average retirement savings by age:

• Under 35: The average retirement savings balance is $30,170.
• 35-44: The average retirement savings balance is $131,950.
• 45-54: The average retirement savings balance is $254,720.
• 55-64: The average retirement savings balance is $408,420.
• 65-74: The average retirement savings balance is $426,070.

While these figures offer insights into savings trends, individual circumstances, goals, and financial strategies also play a significant role in retirement planning. It's important to focus on your unique financial situation and consult financial professionals for personalized guidance.

Average Retirement Savings by Age

Step 1: Under 35

• Average retirement savings: $30,170
• Median retirement savings: $13,000

For individuals under 35, around 45% of families in this category possess retirement accounts, encompassing IRAs, Keoghs, and select employer-sponsored accounts like 401(k)s and 403(b)s. Among those with retirement holdings, the average value of these holdings is approximately $30,170, with a median value of $13,000.

Step 2: Ages 35 to 44

• Average retirement savings: $131,950
• Median retirement savings: $60,000

This age bracket includes the oldest millennials and the youngest of Generation X. Over 56% of households headed by individuals within this age group have retirement accounts. Earnings tend to be higher during these years, with concurrent higher spending due to family-related costs. Consideration of an IRA can be beneficial for increasing retirement savings during this phase.

Step 3: Ages 45 to 54

• Average retirement savings: $254,720
• Median retirement savings: $100,000

This segment is part of Generation X, and about 58% of households headed by individuals in this age range possess retirement holdings. These years can be lucrative for earning, especially for men. Women's earnings tend to peak earlier, around age 44.

Step 4: Ages 55 to 64

• Average retirement savings: $408,420
• Median retirement savings: $134,000

This age group consists of baby boomers, with many approaching retirement. Approximately 54.5% of households led by baby boomers have retirement holdings. These individuals are nearing Social Security's full retirement age, typically between 65 to 67.

Step 5: Ages 65 to 74

• Average retirement savings: $426,070
• Median retirement savings: $164,000

Most households in this range include someone in retirement or of retirement age. Around 48% of this group possesses retirement accounts, with spending being a focus rather than accumulation. As age increases beyond this point, both average and median retirement account values decline, along with the percentage of individuals with retirement accounts.

For households led by individuals aged 75 or older, the median retirement holdings value is $83,000, with an average holding of $357,920. It's important to recognize that these figures offer insights into retirement savings trends, while individual financial circumstances and goals significantly influence the overall retirement planning process.

Average Retirement Savings for Married Couples by Age

The average retirement savings for married couples based on age are outlined below:

• Under 35: Approximately $11,000
• 35-44: Around $43,000
• 45-54: Approximately $80,000
• 55-64: About $116,000
• 65-74: Around $177,000
• 75 and up: Approximately $133,000

It's vital to recognize that these figures represent averages, and the ideal retirement savings vary based on the unique financial circumstances and retirement aspirations of each couple. Partnering with a financial expert can assist in crafting a tailored retirement plan that aligns with specific needs and goals.

How Much Does the Average American Have in Retirement Savings by Age 60?

In this particular age bracket, which primarily comprises individuals belonging to the baby boomer generation, the average retirement savings stands at approximately $408,420. Simultaneously, the median retirement savings amount to around $134,000. With a significant proportion of this group gradually approaching retirement, these financial figures underscore the varied readiness levels for this life transition.

Around 54.5% of households led by baby boomers have invested in retirement holdings, reflecting a conscientious effort to secure their financial future. The convergence of this demographic with the proximity to Social Security's full retirement age, which typically falls between 65 to 67, marks a crucial juncture for individuals to make informed decisions about their financial security during their post-working years.

As baby boomers navigate this phase, considerations encompass a range of financial factors, including optimizing retirement savings, assessing potential supplementary income streams, and understanding the intricacies of Social Security benefits. The interplay between accumulated savings and projected retirement needs gains prominence as these individuals prepare to transition from the workforce to retirement, underscoring the significance of prudent financial planning during this critical period.

Average Retirement Savings by Age 40

Within this age bracket, which encompasses the oldest millennials and the youngest of Generation X, the average retirement savings stands at approximately $131,950, while the median retirement savings is about $60,000. Notably, over 56% of households led by individuals in this age group hold retirement accounts, highlighting a significant engagement in retirement planning.

These years often constitute a phase of higher earnings as individuals are generally established in their careers. However, this period also aligns with elevated spending due to family-related responsibilities such as childcare and saving for children's education. As a result, financial resources may be stretched across multiple commitments.

The inclination towards saving for retirement is underscored by the substantial percentage of households with retirement accounts, reflecting a proactive approach to securing financial well-being in the later years. As this age bracket straddles the intersection of millennial and Generation X demographics, the dynamics of balancing financial priorities and optimizing savings become crucial for building a strong retirement foundation.

Average Retirement Savings by Age 30

Within the demographic of individuals under 35 years old, the average retirement savings amount to about $30,170, while the median retirement savings are approximately $13,000. Despite the lower figures, a notable 45% of families falling into this age category have taken the initiative to establish retirement accounts, which encompass diverse options such as IRAs, Keoghs, and specific employer-sponsored accounts like 401(k)s and 403(b)s.

This proactive engagement in retirement planning among younger households highlights a growing awareness of the importance of long-term financial security. While the average value of retirement holdings for this group stands at around $30,170, the median value of $13,000 underscores the distribution of savings across this age spectrum.

Considering that individuals under 35 have more extensive timeframes for savings growth, the focus on initiating retirement accounts signifies a commitment to harness the benefits of compounding over the years. The presence of retirement accounts, even with varying savings levels, sets the foundation for building on these initial investments as individuals progress in their careers and financial journey. This early involvement in retirement planning reflects a strategic outlook that aligns with the evolving landscape of financial preparedness.

Average Retirement Savings by Age 45

Within this segment, representing Generation X, the average retirement savings tally approximately $254,720, while the median retirement savings stand at approximately $100,000. Notably, around 58% of households helmed by individuals in this age category have taken affirmative steps by establishing retirement holdings, signifying a growing commitment to securing their financial future.

These years are emblematic of Generation X's financial fortitude, encompassing a phase where earnings potential can peak, particularly for men. While men typically experience an uptick in earnings until around age 55, women's earnings often plateau earlier, around age 44.

The engagement in retirement planning demonstrated by a majority of households in this age bracket underscores a collective understanding of the need to lay the groundwork for post-retirement financial security. As the Generation X cohort navigates these years of earning power, the efforts to establish retirement accounts reflect a strategic approach to capitalize on the benefits of compound growth over time.

The diverse distribution of both average and median retirement savings within this demographic showcases the varying strategies and financial paths individuals undertake within this stage of their financial journey. Such proactive involvement in retirement planning positions Generation X to effectively address the multifaceted challenges and opportunities that come with transitioning from active work years to retirement.

What Are the Tips on Saving for Retirement?

Initiating retirement savings requires a strategic approach. A convenient route is enrolling in an employer-sponsored initiative like a 401(k), provided by your company. This method streamlines saving through payroll deposits, removing the complexity as pre-tax income is deducted directly by your employer.

If your company offers matching contributions, you're privileged to receive additional savings (without cost). An added benefit of such accounts is their capacity to lower taxable income, potentially reducing year-end tax obligations.

Another avenue to explore is establishing an emergency fund, often realized through a liquid account like a savings account. Automated transfers from your checking account to the emergency fund can coincide with your paydays. Similarly to payroll deductions, this process requires minimal intervention.

Regardless of your starting age, it's pivotal to outline your retirement goals and calculate the necessary funds. This entails tallying your anticipated income and subtracting expenses spanning housing, sustenance, attire, transportation, healthcare, and bills, while also accounting for leisure and travel expenses. This comprehensive approach offers a practical estimate of the funds required, allowing you to determine an achievable savings target.

Seeking counsel from financial experts, such as investment advisors or retirement specialists, is indispensable. Their experience aids in navigating the nuances of retirement savings, offering informed insights to align your strategy with your long-term financial aspirations.

How Long Will My Retirement Savings Last?

The adequacy of retirement savings hinges on various elements, such as your chosen lifestyle, expenditure patterns, and accumulated savings. While gauging the exact duration your savings will sustain you may be complex, you can employ calculators available online to approximate this timeframe. Alternatively, you can manually perform the calculations.

Initiating the process involves several steps. Begin by assessing your projected income during retirement. Subsequently, meticulously sum up all expenses, ensuring no facet is overlooked. This entails accounting for essential components like housing, sustenance, attire, transportation, healthcare, and leisure pursuits like travel.

It's crucial to avoid underestimating your expenses, as this can potentially lead to financial shortfalls in retirement. By meticulously evaluating both your anticipated income and comprehensive expenditure, you can obtain a rough estimate of the viability of your retirement savings.

This approach furnishes you with valuable insights into whether your current savings trajectory aligns with the financial requirements of your envisioned retirement lifestyle. Should you identify any gaps, strategic adjustments can be made to enhance your long-term financial preparedness.