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Average Savings by Age

Written by Ken Tumin | Published on 8/28/20


The total average savings balance is $34,730, while the average retirement balance is $287,736, according to a 2019 report by MagnifyMoney. As you age, however, some of your savings needs increase, such as ensuring you have enough stashed away to retire. On the other hand, some of your expenses may decrease, such as the amount you need to save for your children’s education or to pay for housing.

Since expenses and goals are in flux, it’s essential to understand the average savings by age to ensure you’re on track.

In this article we will cover:

A breakdown of average savings by age

Savings should be broken into two categories: emergency savings and retirement savings. Consumers should have both types of accounts. Here’s how much the average American has in each type of account, depending on their age.

Average savings under age 35

Average retirement savings: $24,728

Average emergency savings: $8,362

Many people under the age of 35 are in the early stages of their careers, which can mean they’re on the lower end of the salary range. Median earnings for Americans ages 25 to 34 are $47,736 a year, according to the Bureau of Labor Statistics (BLS), and this can make it harder to save if your expenses are high.

During their late 20s and early 30s, many people may still be paying off student loans or completing their education. According to a 2018 survey from the National Association of Realtors (NAR), the average age of a first-time homebuyer is 32, and coming up with a down payment could lower the amount

available for emergency savings. This age group also may not have a lot of experience managing their personal finance, and many may not have started saving for retirement, which can seem far off.

Average savings ages 35 to 44

Average retirement savings: $68,935

Average emergency savings: $20,839

The average savings balances among 35- to 44-year-olds suggest that this age group is taking advantage of increasing earnings, with the median annual salary for this age group at $59,020, according to BLS data. The averages above indicate that this age group is putting away more money in their savings and retirement accounts than the previous age group. 

However, while their savings are increasing, so are their needs. Households in this age group often have a growing family, and they may incur additional food, shelter, child care and education costs. They also may be setting aside funds for long-term savings goals, such as purchasing a new home or paying for a child’s education. Retirement is a decade closer at this point, and it’s evident this age group has begun to stash away funds for their golden years.

Average savings ages 45 to 54

Average retirement savings: $129,051

Average emergency savings: $30,441

The median salary for people between the ages of 45 and 54 is $59,488 per year, which is only slightly higher than the previous age group. By this age, people may have reached a plateau in their career with earnings holding steady. However, they may have children in college, and if they’re helping to pay for their education it can put a strain on savings’ efforts.

Average retirement savings for those in this age range suggest they have started gaining traction on their retirement savings, stashing away nearly twice as much as those who are a decade younger. This is likely due to the fact that retirement isn’t a faraway goal anymore, and they may be making up for lost time.

Average savings ages 55 to 64

Average retirement savings: $190,505

Average emergency savings: $45,133

Between the ages of 55 and 64, the median income starts to drop, while savings continues to increase. The median annual salary for those between the ages of 55 and 64 is $56,680, which is a slight decline from the previous age group. 

Households in this age range may already begin to tap into their retirement savings, since the age to withdraw without penalty is 59 ½.

Average savings age 65+

Average retirement savings: $209,984

Average emergency savings: $54,089

By age 65, many people have left the workforce. According to a recent Gallup poll, the average age that people expect to retire is 66. However, several people continue to earn money through part-time jobs. The labor force participation rate for people 75 and older nearly doubled between 1996 and 2016, and it’s projected to continue to rise. 

The amount added to retirement savings during this stage in life generally slows down considerably as a result, and balances soon start to decline as funds are being withdrawn for living expenses. However, expenses also drop considerably for those in this age group. Child-rearing is likely over by this time, and some may choose to downsize homes, which can reduce costs.

How much should you really have in savings?

How much you should have in your emergency fund

Average Emergency Savings vs. Emergency Savings Goals
  Average emergency savings Emergency savings goal*
By age 35 $8,362 $14,114
By age 45 $20,839 $17,800
By age 55 $30,441 $18,847
By age 65 $45,133 $16,553
By age 65+ $54,089 $12,715
*This was calculated based on BLS Data by taking the average annual expenditures for each age group and dividing by four to come up with three months’ worth of expenses, the suggested emergency fund balance.

As you can see, the average American under the age of 35 does not have a fully funded emergency fund. However, age groups that follow do. This may be due to having higher incomes, which can make it easier to save.

Ideally, your emergency fund should have enough money set aside for an unexpected financial emergency, such as a surprise medical cost or an expensive car repair. It’s also intended to provide liquid assets in case of a job loss.

In general, the rule of thumb for emergency funds is to have three to six months’ worth of expenses saved in an account that offers liquidity. And once you use your emergency fund, it’s essential to start saving again right away so that you’re prepared for the next emergency.

How much you should have saved for retirement

Average Retirement Savings vs. Retirement Savings Goals
  Average retirement savings Retirement savings goal*
By age 35 $24,728 $95,472
By age 45 $68,935 $236,080
By age 55 $129,051 $416,416
By age 65 $190,505 $453,440
By age 65+ $209,984 $529,360
*This was calculated by taking the BLS median weekly salary by age, multiplying that number by 52 weeks in a year and multiplying that amount by the retirement savings rule of thumb outlined below.

While Americans are doing fine with emergency fund savings, the same can’t be said about retirement. As you can see, Americans fall short of the ideal retirement savings balance across every age group – and by a large amount.

Fidelity’s rule of thumb for retirement savings, for instance, is to have two times your income saved in retirement by the time you turn 35, four times by the time you turn 45, seven times by age 55, eight times by age 60 and 10 times your income by age 67.

As people age, they tend to start taking retirement savings more seriously. However, the earlier you start investing in your 401(k) or IRA, the more you can take advantage of a good rate of return, which can help your retirement savings grow faster. It’s harder to catch up when you start saving late.

Where to keep your savings

Emergency and retirement savings are important, and it’s equally important to know where to keep them. 

Where to keep emergency funds
  • Cash management accounts
  • Savings accounts
  • Money market accounts
  • Certificates of deposit (CDs)

Emergency funds should be kept in accounts that are liquid, so you can access your money on a moment’s notice. Your emergency funds also need to be safe, so it’s best to consider deposit accounts insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). You also should look for a savings account that pays a competitive interest rate. Good choices can be cash management accounts, savings accounts, money market accounts and certificates of deposit (CDs).

Where to keep retirement savings
  • 401(k)
  • IRA

Retirement savings should be kept in retirement accounts, such as a 401(k) or IRA. This will allow your money to grow tax deferred, which can help you reach your retirement goals. Personal retirement accounts supplement the Social Security benefits the government provides, offering retirees a greater sense of financial wellbeing.

With some retirement savings accounts, such as a 401(k), you can invest your money in stocks or mutual funds. The types of investment vehicles you choose should be based on your age group. For example, if you’re under 35 and have decades left before you’ll need to draw on your retirement savings, you can consider accounts that are invested in the market, offering the potential of greater gains but at a greater risk if the stocks or mutual funds decrease in value. As you get closer to retirement, you may want to move your money into safer investment vehicles, such as CDs or money market funds.

5 tips to improve your savings habits

How much you can save will depend on several factors, including your age, household size and income. That being said, it’s possible to manage your money in a way in which you maximize your savings and bring your balance closer to the ideal amount for your age and lifestyle.

  1. Set a monthly savings goal: Whether it’s a percentage of your income or a flat amount, set a savings goal each month. It can be helpful to attach it to a purpose, such as saving for an emergency to reduce money stress, or having enough money for the retirement lifestyle you wish to have.
  2. Automate your savings: Take a “set it and forget it” approach to savings by signing up for automatic savings withdrawals. Having money directly transferred from your paycheck to an emergency or retirement savings account can help you grow your balance without having to think about it. Be sure to increase your savings periodically, every time you get a raise.
  3. Pay down debt: It’s hard to get traction on saving when you’re trying to keep up with your bills. Currently, Americans pay $121 billion in credit card interest each year. If you carry a balance, save interest and potential fees by paying it off.
  4. Review your bills: When’s the last time you checked how much you’re paying for your phone or cable service? How about your auto insurance? Even a modest increase can add up to a few hundred dollars over the course of the year. Be diligent about what you’re paying, and shop around for better deals.
  5. Cut the excess: Track your spending and look for expenses you can cut. You may be surprised at how much you spend on dining out or groceries. Find areas that are high, and implement cost-savings tricks, such as cooking at home more often or tracking sales before meal planning.
Previous Comments
  |     |   Comment #1
"While Americans are doing fine with emergency fund savings, the same can’t be said about retirement. As you can see, Americans fall short of the ideal retirement savings balance across every age group – and by a large amount."

This is no problem. It's not like those who irresponsibly spent everything on wine and debauchery and didn't bother to save enough to pay their own way in retirement don't have a plan. Their retirement plan is to vote for politicians who will take the money away from those who did save responsibly and hand it over to them. In other words, their retirement plan is YOU SUCKA !!!

They are laughing all the way to the bank.
  |     |   Comment #2
I don't believe this for a second. Maybe for the people here, but no way for average people I know.

I wouldn't even say the numbers are even close to average in net worth.

The "average" people I know mostly waste the money they make on shiny new things.
  |     |   Comment #3
averages like those in this article don't represent any real person let alone the "average people" you know. It's merely a statistic. For example if I told you the average savings of 10 people was $100k, that doesn't mean any single one of them has exactly $100k in savings. It could be one of them has $1 million in savings and 9 of them have nothing saved. or one of them has $200k another has $800k and 8 of them have nothing saved. Or all ten of them have savings somewhere in the $50k to $250k range. or really any of countless other combinations of moneys such that the total for all ten is $1 million.
  |     |   Comment #4
Apparently, according to the source notes they used the median average and not the arithmetical mean average to compile these statistics. That would mean that their results show that half of the sample has savings lower than the figure and half higher.

So they are saying for 65+, for example, half of the sample had savings less than $209,984, and the other half had savings higher than $209,984.

We don't know what the sample includes but the inference is that they are saying it represents the entire population of those 65 and over.

Large samples in statistics like this are not very useful to illustrate the kind of point being made here.  For example, in my area, if you retire at 65 with the amount they say in the table would be the retirement savings "goal" ($529,360) you would be a street person (unless you had a significant pension or some other source of significant income other than SS).  It wouldn't work.

The geographical variance of these numbers it too large to be very helpful.

Apologies to the author.  In B school they taught me to write critical challenges of studies and articles and I never got it out of my system.

The article in fact has a lot of useful information.  This is a nit pick I admit.
  |     |   Comment #5
I was feeling like a broke schmuck after seeing the Nicholas Sandmann settlement from CNN recently. Now after reading this article and having nearly 10x the average in retirement savings I don't feel so bad. Could you imagine getting 275 million dollars as a kid? I hope he has a good financial adviser his relatives and charities will be coming out of the woodwork with all that publicity.
  |     |   Comment #6
Don't let it get to you dp1. I understand that after lawyers' fees and taxes his net take was actually $36.27. Justice will be served.
  |     |   Comment #9
D1 The case was settled and is still confidential. No one knows how much he got but I doubt CNN would settle on the full amount. I do hope je got a few million.
  |     |   Comment #21
And I'm sure he and his lawyers wouldn't settle for a mere pittance. I'd be surprised if they didn't end up with a nice chunk of change out of CNN's pockets. And remember, CNN was just one of the suits. The Washington Post also settled 6 months after CNN did. At least 4 other suits are still pending. Like D1 I hope Mr Sandman has gotten himself a decent financial advisor, with all the money he's getting from those settlements (I'm guessing 7 figures at the minimum) he's going to need one.
  |     |   Comment #10
One major concern here is that the BLS suggested emergency fund balance of three months of expenses is no longer adequate;as these pandemic times have revealed. The suggested emergency balance minimum should be six months. Certainly for those who have little or no emergency savings--three months is a good first step; but not an adequate minimum.
  |     |   Comment #11
It's not retirement or savings that's important. It's income. In bankrupt NYS teachers can now retire to 6 figure pensions with FULL MEDICAL. So when you constantly hear about broke teacher's during this pandemic, well, they aren't talking about NY. What this means is on one of these pensions you can retire with a nickle in your pocket and do just fine.
  |     |   Comment #12
I submit that expenses are more important and more manageable on a personal basis except when one is in business for themselves but even then expenses are not too far in the rear seat...I have had opportunities in those areas!
  |     |   Comment #13
I'd say it's a combination of the two. No matter how well you manage your expenses, if you don't have enough income to cover them you'll be in trouble. Conversely, no matter how good your income, if you're spending more than you're getting, you'll equally be in trouble. So you need manage your expenses *and* have a decent flow of income (be that from a job, a pension, SS, 401k, other savings, etc or any combination thereof). Mess up on either one of those two fronts and you're looking at a rocky road in your future.
  |     |   Comment #15
Well all I can say is that my wife's pension will only be about half of her working pay and she pays into her healthcare and pension. It's nowhere near 6 figures at full retirement age. There is a formula you must use to calculate the pension. I can't speak to how things work in NY but that sounds way too high to me.
  |     |   Comment #16
I cant post the link as that's not allowed but have a look at SEE THROUGH NY DOT NET. A whole lot of fun is posted there. The site has been calling for a pension bomb for a decade and no one listened. Well, the bomb is ticking loudly now. Cuomo's hero status, which is BS to begin with, is about to get a major test, and the Washington Republicans are laughing.
  |     |   Comment #17
and lets all remember, you cannot defeat a school budget. In a rural area like mine they could post a 50% increase and it will pass. Why? Because it's the only high paid job left in the area, and people in those positions would not dare vote against it. They can also pay the tax increase without the pain of retirees who amazingly can still afford their house. Too many people sit on one side of the table, and thanks to contingency budgets it's pointless voting anyway. The town next to mine, right next door, posted a 45% increase in tax last year and it still passed easily. If you own property and aren't in the club, like me, you are completely at the mercy of the school superintendent who makes the budget, and who also makes 170k to manage 4 mayberry village elementary schools and the high school. P_D is so spot on! And what can we do? Nothing. Move or suck it up I guess. That's it.
  |     |   Comment #18
And in Michigan and several other states there is no social security for teachers or an offset if they have work that is covered by social security...the latter event requires careful planning
  |     |   Comment #19
That 95th percentile pay is the highest I have seen for teachers pay. New York is a very expensive state to live in though. I still can't figure out why those pensions are so high that's insane. When my wife started her career I laughed at her ultra low pay it was something like $28,000/yr. back then I was making close to $100,000 with O.T. and 3 weeks paid vacation and top notch medical benefits 100% employer paid.
I told her you spent all that money on college for that? Then my job got sent to China and I got a good helping of humble pie to choke down. Now she is one of the few folks around here who still has a good paying job after the covid lock downs. I'm pretty good at looking ahead but I never saw all this coming. Crazy times.
  |     |   Comment #20
It's really not a question of what a teacher is worth deplorable. i think it's a very tough job these days with basically everyone walking around with a camera. I'm sure if I was in that position I'd have F bombs all over you tube that "slipped out". The question is what can you afford. NY is way out there as far as cost per child for education. I believe 1 1/2 times the liberal state of Massachusetts. Do all these states have it wrong? Or did NYS take advantage of having all the NYC billionaires to pay for this. And remember, with unions negotiations always go forward. You can't fix a stupid decision in 1990. I know hell is coming to me next year. I'm budgeting a total tax increase of 5K, and i'm wondering if even that isn't enough.

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