Average Retirement Savings: How Do You Compare? (2024)

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, 61% have tax-preferred accounts and a smaller 21% have pensions, also according to the Federal Reserve.

Knowing how your retirement savings compares to your peers can be helpful. Speak with a financial advisor today to work on a retirement 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, many publications have estimated that the nation’s retirement savings deficit is in the trillions.

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 $87,000 in 2023.

Retirement Account Balances by Age Group

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 latestSurvey of Consumer Finances (SCF) data,the median household net worth for a head of household age 35-44 years old is $135,300. For a head of household aged 45 to 54 years old, that figure is $246,700. In the 55-64 age range, average net worth is $364,270. For those between 65 and 74, the average net worth is $410,000.

Why Social Security Benefits Alone May Not 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 $1,907 as of January 2024. Add the rising debt levels among older Americans and you have a situation far from most peoples’ retirement dream of travel and leisure.

America’s Retirement Savings Gap

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 witha 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.

Do you need help figuring out your required minimum distributions? Try SmartAsset’sRMD calculatorto learn more.

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 expertcan 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 rewards for future rewards, 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

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

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