Retirement savings are personal, and you can't really compare your journey to anyone else's. However, if you're curious about how you stack up against your peers, we've delved into the Federal Reserve's survey data from late 2022 to give you a better idea of how other Americans are doing.
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A look at average retirement savings by age
The median retirement savings for American households as of 2022 is $87,000, meaning half have more than this amount and half are on the other end of the spectrum. The average retirement savings, however, is higher at $333,945. This difference arises because some individuals have significantly larger nest eggs, which drive the average up.
Retirement savings tend to increase with age, so it's often more insightful to compare savings trends within your age group. For example, if you're 40 years old, the median retirement savings for individuals in your age range is $45,000, while the average is $141,517. However, if you've been consistently maxing out your retirement accounts, such as a 401(k) or an individual retirement account (IRA), your retirement savings might exceed these numbers.
Every three years, the Federal Reserve releases the Survey of Consumer Finances (SCF), which provides insights into various financial metrics, such as net worth, income, and retirement savings. Using data from the latest survey conducted in 2022, we've pulled the average retirement savings across different age cohorts. You'll notice that savings trends typically increase until people reach retirement age or stop working, at which point they begin drawing down on the money they have saved up.
| Age group | Median retirement savings | Average retirement savings |
|---|---|---|
| Younger than 35 | $18,880 | $49,127 |
| 35-44 | $45,000 | $141,517 |
| 45-54 | $115,000 | $313,220 |
| 55-64 | $185,000 | $537,563 |
| 65-74 | $200,000 | $609,229 |
| 75 or older | $130,000 | $462,411 |
Data source: Federal Reserve (2023). Values are in 2022 dollars.
Find out if you're on track for a comfortable retirement
Although seeing the retirement savings trends of your peers can give you an idea of how you stack up, it isn't a good measure of how well you are doing on your journey. Your retirement will depend on your individual goals. For example, if you plan to travel around the world or move to a more expensive area, you'll likely need a substantial amount of money saved. However, if you're in good health, have multiple streams of income from different assets, and have paid off your mortgage, you may not need as much money saved as your peers.
Retirement planning can get complicated because it involves many uncertainties, especially if you're decades away from leaving the workforce. Here are a few things to consider to give you a better idea of how much you need to save for retirement to meet your goals:
- Write down your retirement goals. The moves you need to make now will largely depend on the goals you have during retirement. Consider your desired lifestyle, where you want to live, and any major expenses you anticipate, such as healthcare or travel. Envision a day in retirement from the time you wake up until the time you sleep to help you create a list of goals.
- Estimate the costs. Tally up the expenses that come with the retirement lifestyle you envision. Also, calculate your annual expenses, such as housing, food, healthcare, insurance, and other recurring costs.
- Determine where you stand. Look at all your retirement account balances and any other investments earmarked for retirement to see where you are now.
- Review your future sources of income. Even when you close the door on your career, you may still have income coming in from pensions, Social Security, rental income, and dividends from your investment portfolio. Write down all your expected sources of income so you can get a better idea of how much money you'll have to cover your expenses.
- Use retirement savings planning tools. Plug this information into a retirement savings planning tool to get a ballpark estimate of how much you need for retirement and if you're on track. Keep in mind that different tools may provide different answers, so you might want to consult with a professional to get a more personalized assessment of your retirement planning.
Looking at the retirement numbers of different age groups can motivate you to achieve your own personal goals. Even if your retirement savings aren't higher than your peers', taking steps to plan for the future will put you in a better spot later, no matter where you stand now.
