The Median Savings Balance By Age
It goes without saying that low salaries and living paycheck to paycheck make it difficult to set anything aside. But are there any other factors impacting American savings accounts?
The following statistics about American savings offer an overview of what the various age groups are saving and how it stacks up against recommendations from experts.
The average savings by age 25 are relatively low in the US. There are a variety of economic forces at play that make it difficult to have any considerable chunk of money tucked away this early on in life. The weight of student-loan debt and the average millennial income are just some of the obstacles.
5. The average student loan debt is $32,731, while the median debt amounts to $17,000.
High levels of debt combined with an entry level salary often lead to people in the 20-30 age group struggling financially. But the future isn’t entirely bleak. Statistics on average retirement savings by age reveal that young people are still managing to contribute to their retirement account.
6. Millennials are doing a better job saving than older generations.
Recent studies show that Millennials started saving for retirement earlier than Gen Xers and baby boomers. The latest Better Money Habits report from Bank of America surveyed over 1,900 people and found that 73% of millennial respondents were saving.
Of those, 75% were saving for retirement. But the head start has not translated into tangible wealth building, and millennials have less money than the same age group had over ten or twenty years ago.
People in this age group have likely moved up the ranks in their jobs and past the entry-level paychecks. But the growing list of expenses at this age, which includes a mortgage and the cost of starting a family, might make it difficult to think about a financial cushion for retirement. Keep reading to find out more about the average savings by age.
7. Adults aged 35 to 44 said the biggest obstacle to saving was living paycheck to paycheck.
Financial experts recommend that people in this age group have an equivalent of an annual salary in their savings by the age of 30. The savings should be double that amount at 35 and three as high by the time they are 40. Let’s take a look at the average retirement savings for this age group.
8. Median household retirement savings for the 35-44 age group is around $40,000.
The Center for Retirement Research at Boston College concluded that these figures are well below the recommended retirement savings by this age group. According to experts, median retirement savings by that age should be 18-23% of the annual salary.
Experts are advising Americans to tighten the family budget and increase the percentage of the salary allocated for the savings account in order to attain those targets.
Ideally, this is the prime of one’s professional career, and their salary should reflect that. With any luck, people in this age group managed to pay off most of their debt and can look forward to freeing up more money. However, the house got bigger, and the kids are older.
People in this age group might also be in need for another student or car loan. Check out the data on the average American savings by this age.
9. Median household retirement savings for the 45-54 age group is around $97,000.
At first glance, this might seem like a solid sum of money for a retirement plan. But this age group appears to be blowing way too much money on things they could do without while ignoring their median retirement income.
10. The 45-54 age group spends an average of $7,230 on food away from home, which accounts for 40% of their food expenditures.
An American’s savings in the bank should be equivalent to four annual salaries by the time he is 45 years old. Although this age group does well when it comes to their retirement plan savings, it’s vulnerable to irrational spending and new expenses such as student and car loans.
At this stage, some might still be struggling to understand from what part of income should someone take savings. But things seem to improve as they get older.
People in their 50s are nearing retirement. But helping with college tuition, car payments and covering a stack of different bills are still hurting the household budget. The following is an overview of the average retirement savings by the age of 50.
11. The average retirement savings balance for those in the 55-64 age group is around $135,000.
Although this might sound like a lot of money, it’s an awfully small amount to retire on. Most pensioners withdraw roughly 4% of their savings each year. With a retirement account of $135,000 that equals to $5,400 annually or $450 each month. Even with Social Security benefits, making ends meet with that sum of money would be extremely difficult.
That figure also falls short of the recommended retirement savings for this age group, which should be equivalent to at least six annual salaries.
Now that the finish line is in sight, individuals in this group should be preparing to dig into their hard-earned savings. At this point, it is becoming increasingly difficult to save enough money to make up for any shortfalls. Let’s see what are the numbers when it comes to average savings in the age of 65.
12. Americans in their 60s have a median savings balance of $172,000.
The most recent data shows that the average American net worth at retirement for homeowners is $201,500. The median savings balance is slightly lower. But this age group still ranks highest when it comes to savings. Naturally, these are the people that have been working the longest and by extension should have the largest nest egg.
However, American retirement savings statistics reveal that many people plan to keep working into their 70s.
13. 21% of Americans have no retirement savings, and 55% of the population believe they will have to work past age 65.
Unfortunately, many believe they will work past the age of 65, and many think there is a possibility they will outlive their retirement savings. In these situations, Americans are advised to consult with financial experts in order to salvage their golden years.
14. The average monthly benefit for a retired worker is $1,471.
An estimated 64 million Americans received more than one trillion dollars in Social Security benefits throughout last year. Of those, 44.5 million were retired workers who collected an estimated $65.4 billion per month.
Although benefits vary depending on the person’s work history, the monthly average stood at just over $1,470. Americans can boost their Social Security benefits by asking for a raise at work.