Are you saving enough for your retirement? How are you comparing to other Americans? In this article we will be looking at average retirement savings by age group in the United States. This article is using information found in Economic Policy Institute’s The State of American Retirement article, which based their information on the Federal Reserve Board’s Survey of Consumer Finances.
The information presents here is similar, but not the same, as another article: Are You Wealthy? U.S. Net Worth by Age and Income
What is the Average Retirement Savings?
Let’s say that the results are, well, not pretty. We should all be striving to be well above average based on the latest results. Here is a chart from EPI.org:
Here is the same data tabulated for easier reading.
|Age Group||Average Retirement Savings|
|Working Age (31-61)||$95,776|
This is kind of unbelievable to me. Among all working age Americans, the average retirement savings is less than $100,000. Even the highest age group has average savings of only $163,577. This basically mean that most Americans are not going to be able to retire without help from Social Security, or they would have to continue to work.
But this is the average. Here is the problem with looking at the average…the average net worth between Bill Gates and mine is about $52 billion…basically half of Bill Gates’ net worth…lol.
What is the Median Retirement Savings?
The median is actually a much more accurate picture because it reflects where most Americans are with their retirement savings. Here is another chart from EPI.org:
Yikes…really…every age group has less than $10,000 in retirement savings? And the best group has a median retirement savings of $17,000? That is bleak.
My only hope is that the past 6 years have improved these numbers dramatically; but even if we are back at the 2007 peak, the numbers are still aren’t all that great.
How to Break Through the Averages
Sometimes it can sound like personal finance writers are beating a dead horse, but the basics of improving your financial situation remain.
If you want to avoid being on the negative side of these averages, you have to do three basic things:
- Spend less than you earn. If you spend more than you make you are going into debt and won’t have any money left over for retirement savings, so you have to get this first.
- Automate your retirement savings. Instead of trying to remember to contribute to your retirement accounts, take the money out of your possession before you have a chance to spend it with automated savings.
- Increase contributions as you age. If at all possible increase your retirement contributions each year as you age, even if by just a little bit. An extra half of a percent every year can do wonders for your retirement nest egg.
As a society, we are doing a terrible job of saving for retirement. If you are among the average Americans, it is time to take a serious look at your finances, and here is the next article to read: 12 Steps to Financial Freedom and Personal Finance Success.
Pinyo is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.