This Is the Average 50-Something's Cash Savings Balance

How does your balance compare?

Your 50s are a pivotal decade. At that point, you may have reached your peak earnings, and you may be getting more serious about planning for retirement. You may also be grappling with some large expenses, like putting your kids through college.

It's important to have a healthy level of savings by the time your 50s roll around. At this stage of life, the last thing you want is to accrue credit card debt when an emergency expense comes up out of the blue.

In fact, recent data from Personal Capital shows that 50-somethings have a respectable amount of cash on hand in savings. But how does your balance compare?

What people in their 50s have saved

The average cash savings balance among 50-somethings, based on Personal Capital users' accounts, is $63,961. To be clear, that's not what 50-somethings have saved in total -- it's merely cash savings. Funds in other accounts, like IRAs and even checking accounts, don't count toward that amount.

How much money should you have in your savings account?

If you have a near-term goal (say, buying a boat or upgrading to a new car), then the money you're saving for it should go in the bank. You should also have enough money in your savings account for a full emergency fund. That generally means having ample cash to pay for three to six months of essential bills.

So, let's say you have around $64,000 in savings and your monthly expenses cost $6,000. In that case, you're well beyond the amount of savings needed to cover six months of bills. And in that event, you may want to think about diverting some of your money to a brokerage account or retirement plan. This especially holds true if you're behind on retirement savings.

Once you turn 50, you're allowed to make catch-up contributions in both an IRA and a 401(k). That's money you should aim to fund your account with if your nest egg isn't as robust as you'd like it to be. And one way to do so is to move some cash out of your savings account.

In fact, keeping too much cash in savings at this stage of life might not be the best move. With a savings account, you'll commonly earn a much lower return on your money than you will by investing it -- even during periods when banks are paying more generously.

Now if retirement is, say, 10 years away, you may not want to invest your money too aggressively. But even a conservative investment portfolio is likely to yield a notably higher return than what you'll get in your savings account, so now's a good time to assess your level of cash reserves and make sure it's appropriate.

Keep in mind that before you officially retire, you'll actually want to have enough cash in savings to cover one to two years of expenses. That way, you'll have the option to leave your investments alone in case the market tanks. But you can also keep some of that cash in your IRA or 401(k). And if you're not planning to retire for another decade, you don't need that much cash on hand now.

Ultimately, having a lot of savings is only a good thing to a point. Make sure you don't have too much money sitting around in cash, especially if you feel your IRA or 401(k) plan balance isn't quite where you want it to be.