Planning for retirement requires thoughtful money management, whether that involves seeking guidance from a financial advisor, focusing on catch-up contribution limits or just opening a high-yield savings account. With so many moving pieces, everyone’s saving plan is different.
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While it helps to start saving as early as possible to let your money grow and weather market fluctuations long-term, not everyone has the foresight to start retirement planning in their 20s. Regardless of your age, it’s important to review where your savings are right now and determine where you want them to be by the time you quit your 9-to-5.
Curious glances at what other Americans are doing to prepare can help you assess your own level of preparedness. And thanks to research from the Federal Reserve, you can see how you stack up against others in your age bracket.
While retirement savings by age can vary, here’s a quick look at what the average American has saved for their golden years at every age.
Money saved in your retirement accounts is the foundation for how comfortable you’ll be as a retiree. It’s not about just thinking about retirement planning once you hit age 65, it takes years of saving and investing.
As averages can be skewed by extreme over and under outliers, it’s also good to look at the median retirement savings. To see how you compare to other Americans’ retirement savings, both in median and mean approximations, here are some estimations from the Federal Reserve Board:
|
Age Range |
Average Retirement Savings |
Median Retirement Savings |
|
Under 35 |
$49,130 |
$18,880 |
|
35 to 44 |
$141,520 |
$45,000 |
|
45 to 54 |
$313,220 |
$115,000 |
|
55 to 64 |
$537,560 |
$185,000 |
|
65 to 74 |
$609,230 |
$200,000 |
|
75 and older |
$462,410 |
$130,000 |
Every generation has its own financial trials and tribulations having gone through everything from the Great Depression to the Great Recession. However, it’s important to track the finances of these specific age groups to not only compare your own progress but to also factor in what economic or global events have affected them at large.
Here are some key takeaways:
-
Average Savings of Gen Z: $29,000
-
Average Savings of Millennials: $49,000
-
Average Savings of Gen X: $82,000
-
Average Savings of Boomers: $289,000
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If you’re still scratching your head at just how much you need to save in order to retire at the age you want and achieve your retirement goals, there are some helpful goals to meet.
According to Fidelity, a great way to make sure you have enough in your retirement savings is to save at least 15% of your pretax income each year. Other experts say even 10% can be enough if you can’t take out a full 15%. The earlier you can start setting aside money for retirement, the lower your yearly savings rate can be.
If you haven’t started saving for retirement yet, it’s not too late. If you start saving at 30, you might want to save 18% annually for retirement; or, if you start saving at 35, you should save 23%, according to Fidelity.
A helpful starting point is to strive to put aside at least one times your annual income by age 30. Then, you want to stay on track by saving three times your income by 40, six times by 50 and eight times by 60. This rule is based on the assumption that you save 15% of your income annually from the age of 25 and are planning to retire at 67.
This technique is a helpful way of gauging where you are in your retirement savings and can give you goals that will allow you to maintain your lifestyle in retirement.
The bottom line is that retirement savings are important, and depending on where you are in your life, trickier to navigate. Though financial experts recommend saving 15% of your pre-tax income for retirement if you start at age 25, and 18% if you start at age 30, everyone’s money situation is different.
However, if you haven’t started yet you should put as much away as you can to help secure your comfortable and stress-free future retirement.
Jordan Rosenfeld contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: How Do Your Retirement Savings Compare to the Average American’s?
