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Understanding your financial health can often feel like navigating through a dense forest without a map. One way to find your bearings is to consider the average retirement savings by age to see where you stand. This can give you a basic idea of where you are compared to your peers and whether you are on track to meet your retirement goals.

Find out how much people have saved up at different life stages and strategies you can use to save more.

What are age-based savings averages?

When we talk about average savings, we’re referring to the typical amount people have set aside in savings accounts and retirement accounts that isn’t spent on monthly bills and purchases. These figures vary widely based on income, lifestyle, and financial responsibilities. Some people will have a lot more, and others will have less.

These numbers can mean different things depending on where you are in life:

  • These averages can encourage young adults to start saving early and benefit from compound interest over time.
  • Middle-aged savers might use them to check their progress and make necessary adjustments.
  • Older adults might find these figures helpful for finalizing their retirement strategy.

Average vs. median savings by age

When looking at savings by age, there are two numbers to consider: average and median. The average savings by age represents how much people have if total savings are divided equally. The median retirement savings by age show what the middle person in a group has.

For example, let’s say there are three people. One has $0, one has $10,000 and one has $50,000. The average savings is $20,000 ($60,000/3). The median is $10,000 ($0, $10,000, $50,000).¹ In general, the average savings by age is usually higher than the median since some people are super-savers and push up the average.

Approach the following numbers with a grain of salt. They don’t account for personal variables like debt, medical bills, or unexpected expenses that could impact your ability to save.

Still, these averages can serve as a rough guideline for your own savings goals. Regardless of your age, it’s never too late to start or refine your savings plan.

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At age 25: How much should be saved?

At 25, you’re likely at the beginning stages of your career, which makes it the perfect time to establish good saving habits. While the exact amount you should save depends on your income and goals, putting aside at least 15% of your pre-tax income for retirement is a solid guideline.²

Additionally, building an emergency fund covering three to six months of expenses can help create financial security.³ With emergency savings, you can be ready for any issues life might throw your way, like sudden car repairs, medical bills, or a lost job.

Remember, every little bit helps. Even if you can only set aside 5% of your pre-tax income per year for retirement, that’s still better than nothing.

Average savings at age 25

A research report tracked how much people have saved up in their workplace retirement plans, like a 401(k) plan. At this point, the average savings by age for people younger than 25 is $5,236 and the median is $1,948.⁴ In other words, most people at this age haven’t really started saving much yet, as they are still at the start of their careers.

At age 30: How much should be saved?

By age 30, your career and earnings may have started to stabilize, offering more opportunities to save. Financial experts often suggest having the equivalent of your annual salary saved by the age of 30.⁵ If you’re earning $60,000 a year, ideally, you should have $60,000 saved up.

This includes contributions to retirement accounts, emergency funds, and other savings accounts. This age is also a critical time to double-check your financial habits, ensuring you’re not only saving but also investing wisely to grow your wealth.

Average savings at age 30

For people aged between 25-34, the average retirement savings is $30,017 and the median retirement savings is $11,357.⁴

At age 40: How much should be saved?

Your 40s means entering your peak earning years, which can significantly impact your ability to save for retirement. By this age, aim to have three times your annual salary saved up.⁵

This period is also an opportunity to aggressively pay down high-interest debt and increase your retirement contributions, especially if you got off to a late start.

Average savings at age 40

For people aged between 35-44, the average retirement savings is $76,354, and the median retirement savings is $28,318.⁴

At age 50: How much should be saved?

In your 50s, you’re entering the home stretch for retirement. Financial advisors recommend having six times your annual salary in savings.⁵ This decade is crucial for catching up on retirement contributions, reassessing your investment risk, and planning for healthcare costs.

Maximizing contributions to retirement accounts can be particularly beneficial due to catch-up contribution allowances. You can save more per year in an individual retirement account (IRA) and 401(k).

The IRS sets a maximum limit for how much you can put in these retirement plans per year, which goes up over time.⁶

Average savings at age 50

For people aged between 45-54, the average retirement savings is $142,069 and the median retirement savings is $48,301.⁴

What is the average savings at retirement?

The average retirement savings by age 65 is $232,710 and the median is $70,620.⁴

Remember, these numbers only represent what people have in a workplace retirement plan, like a 401(k). Retirees could have more money in an IRA, personal savings, a health savings account (HSA), and other financial accounts.

Determining your ideal savings target

Your ideal savings target depends on factors like your retirement goals, expected lifestyle, and anticipated expenses. A general rule of thumb is to replace 70-80% of your pre-retirement income through savings and Social Security.⁷

Using this measure, if you were earning $100,000 a year before retiring, your retirement income should be between $70,000 to $80,000.

However, calculating your specific needs will provide a more accurate savings goal. Make a list of what you expect to pay per year after retiring. Consider housing, food, insurance, travel, entertainment, and all other expenses.

Example calculation

Let’s say you calculate you’ll need $80,000 a year to cover your retirement needs and you expect to get $20,000 a year from Social Security and $20,000 from a work pension. That means you’ll need another $40,000 per year from your savings.

You could then multiply this amount by the number of years you think your retirement will last. If you expect retirement to last 20 years, you’d need roughly $800,000. Since you don’t know how long you’ll live, this takes some guesswork.

Tips to accelerate your savings

Saving money helps ensure financial independence, provides security against unexpected expenses, and enables you to achieve personal and financial goals. Saving early helps you take advantage of compound interest, potentially turning modest savings into large sums over time.

Compound interest is like moving a giant boulder. Progress is slow initially, but once you get moving, the pace really picks up. The more you save up, the more you’ll earn off interest and investing.

Ready to start building your nest egg? Here are some tips to increase your savings:

Maximize savings at any age

While average savings by age is a good benchmark to see how you’re progressing, your personal savings goals should be tailored to your unique financial situation.

Building a robust retirement fund offers peace of mind and security in your golden years. Likewise, maintaining an emergency fund and saving for short-term goals enables you to confidently navigate financial challenges.

Start today, and take control of your financial future by opening a retirement account.

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¹ Information from Dummies’ "The three types of averages" as of April 4, 2024: https://www.dummies.com/article/academics-the-arts/math/pre-algebra/the-three-types-of-average-median-mode-and-mean-168773/

² Information from Fidelity's "How much should I save for retirement?" as of April 4, 2024: https://www.fidelity.com/viewpoints/retirement/how-much-money-should-I-save

³ Information from Dave Ramsey's "Seven Baby Steps" as of April 4, 2024: https://www.ramseysolutions.com/dave-ramsey-7-baby-steps-rs-24887-b#baby-step-3

⁴ Information from Vanguard's "How America saves 2023" as of April 4, 2024: https://institutional.vanguard.com/content/dam/inst/iig-transformation/has/2023/pdf/has-insights/how-america-saves-report-2023.pdf

⁵ Information from Fidelity's "How much do I need to retire?" as of April 4, 2024: https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire

⁶ Information from IRS' "401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000" as of April 4, 2024: https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000

⁷ Information from WSJ's "How much of my paycheck should I save?" as of April 4, 2024: https://www.wsj.com/buyside/personal-finance/how-much-of-my-paycheck-should-i-save-01671734785

⁸ Information from New York Life's "The 4% rule for retirement" as of April 4, 2024: https://www.newyorklife.com/articles/four-percent-rule-retirement

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