Even Americans with only modest retirement funds may be shocked to learn how many people are in desperate straits: as in, they have no nest egg at all.
Research by the Federal Reserve shows that an astounding one in four Americans (including the 27% who consider themselves retired) have absolutely nothing saved.
And even if you have something tucked away, it may not be enough — though that is something you can change even late in the game.
Americans run an estimated $3.68 trillion behind in retirement savings, according to the Employee Benefit Research Institute. While this includes all people aged 35 to 64, those in their 60s still didn’t fare too well.
Here’s how your savings stack up — and what you can do if you’re falling behind.
'Hold onto your money': Jeff Bezos issued a financial warning, says you might want to rethink buying a 'new automobile, refrigerator, or whatever' — here are 3 better recession-proof buys
Better than NFTs: You don't have to be ultra-rich to own a piece of a Pablo Picasso. Here's how to enter the fine art market
What’s the average?
A Vanguard study found those between 55 and 64 held an average of roughly $256,000. But this includes high income earners; breaking the figures down, it shrinks to a median of about $90,000.
Interestingly, much has changed in even the short time since 2021, the source of figures for Vanguard’s study. Last year, Vanguard noted that retirement savings actually increased, thanks to strong performance in the stock market.
But of course since then, Wall Street’s woes have persisted for much of this year, as even otherwise strong stocks have been resoundingly punished.
Which means 2023 numbers may drop significantly — though with dollar cost averaging, people who stick it out and keep investing will be rewarded if the market returns to full strength.
Is there a magic retirement number?
So how much should you have by the time you’re 60?
Retirement calculators can help you get some answers. But the best thing Americans can do is head to a financial adviser who can help them reach their goals.
If you’d like a broader approach, Fidelity has ways to pinpoint the right numbers for you. Broadly speaking, Americans should aim for the equivalent of their salary by age 30, three times by 40, six times by 50, and eight times by 60.
So if you’re a 60-year-old American and make $50,000 per year, that means you should have $400,000 saved in your retirement account. As you can see, neither the average nor the median retirement amount comes even close.
That said, the “should” amount doesn’t account for a host of variables. Consider for example how much you’ll be able to cut expenses in retirement, the money you may take in through Social Security, assets you can unload or the sale of a home.
How can you balance the numbers?
First and foremost, speak with a financial adviser. If you don’t have one, talk to friends who have fared well with their adviser or seek referrals from someone you trust.
Or, look for one on your own. Researching and calling multiple financial planners can be a time-consuming hassle, but there are ways you can easily browse vetted advisers who fit your needs. Booking a consultation is free and only takes a few minutes.
Remember, it’s never too late to start putting cash aside. Even 5% of each paycheck adds an additional $96 bi-weekly, or $2,500 at the end of the year, which can then compound.
And that’s far better than the zero mark that applies to 25% of Americans: all of whom deserve better than to retire their savings efforts before they start.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Vanguard reported that Americans ages 55 to 64 have a median 401(k) balance of $70,620 and an average balance of $232,710 in How America Saves 2023. A 2024 Empower article reported that Americans in their 60s have a median 401(k) balance of $209,382 and an average balance of $555,621.
The average 60-year-old has a 401(k) balance of $70,000 to $210,000. A common rule of thumb is to have eight times your salary in retirement savings by age 60. If you're behind on yours, contribute as much as possible to your 401(k) and IRA, consider delaying retirement, and look for ways to cut costs when you retire.
The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000.
How much should I have saved for retirement by age 60? We recommend that by the age of 60, you have about eight times your current salary saved for retirement. So, if you earn $75,000 a year, you would have between $525,000 to $600,000 in retirement savings by 60.
Social Security offers a monthly benefit check to many kinds of recipients. As of May 2024, the average check is $1,778.24, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
More? Financial planners often recommend replacing about 80% of your pre-retirement income to sustain the same lifestyle after you retire. This means that, if you earn $100,000 per year, you'd aim for at least $80,000 of income (in today's dollars) in retirement.
You should have 5.5 to 11 times your salary saved by age 60 to consider yourself on track for retirement, according to T. Rowe Price. So, if you earn $100,000 a year, ideally you have savings of $550,000 to $1.1 million in your retirement accounts by age 60.
The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.
So, can you retire at 60 with $1 million, and what would that look like? It's certainly possible to retire comfortably in this scenario. But it's wise to review your spending needs, taxes, health care, and other factors as you prepare for your retirement years.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations. If you're not reaching these benchmarks, it's okay.
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
Fidelity's guideline: Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Factors that will impact your personal savings goal include the age you plan to retire and the lifestyle you hope to have in retirement.
Introduction: My name is Domingo Moore, I am a attractive, gorgeous, funny, jolly, spotless, nice, fantastic person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
