Saving for retirement is one of the greatest gifts you can give to yourself, but sometime the number in the account can seem discouraging. It is important to keep expectations realistic, and to do so requires some points of reference. While it is not always wise or healthy to compare, it is good to at least know where people your age are. Now, there are many different ways to measure retirement savings, and many different data sets to pull from. Take our numbers with a grain of salt due to these possible variances. We will be looking at the Center for Retirement Research numbers regarding the median retirement balance in different age groups. So, here is the average retirement savings for those over 60.
The Numbers
In people aged 55-64, the Center for Retirement Research found that the median retirement account balance is $104,000. Now, there are a few pieces of context to work out here. First, these numbers are from 2017. Obviously there will be some variance, especially after the recent coronavirus crisis causing many to tap into savings they probably meant to leave untouched. Additionally, this does not mean $104k is optimal. Ideally you will have much more than this, as the idea is it is the only money you will have or need in retirement. This brings us to the last point, that these numbers aren’t indicative of the entirety of these subject’s retirement savings. This only counts 401(k)/IRA balance, so it doesn’t include any assets outside of these. So, if you hold property, cash savings, personal brokerage accounts, or anything else that isn’t included here, you want to factor that in.
What If I’m Not Over 60?
The numbers for people who are a little younger break down as follows:
- Ages 35-44 have an average account balance of $37,000
- Ages 45-54 have an average account balance of $80,000
What do these numbers mean? Firstly, it shows that retirement savings clearly see an uptick later in life. This is for a few reasons, one of which being awareness. You can get ahead of the pack just by thinking about it earlier and life and setting aside as much as you possibly can. The other, though, is that income tends to grow as you age, and that can’t always be helped. Again, these are great numbers to use when comparing just your IRA/401(k) balance. This should not be how you decide what your total retirement savings should look, as it isn’t a wholesome look. As long as you take these in the right context, they can help you stay educated and motivated.
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