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Average Savings By Age


Written by Brittney Laryea

The most recent U.S. Survey of Consumer Finances seems to indicate the younger Americans are, the less they have in savings. We analyzed the federal data to discover the average savings by age.

The analysis reveals the youngest members of the workforce don’t have much to back them in an emergency, as under-35 households in America average less than $5,000 in their savings accounts. As they age and incomes rise, so do the amounts Americans put away in savings and for retirement, but not so much in certificates of deposit, or CDs. Generally, CDs are passed over as Americans elect to keep midterm savings in savings accounts and seek greater returns on long-term savings in retirement accounts.

Types of Savings Accounts

Savings Accounts. About 50 percent of households have a savings account — that is, an interest-earning account at a bank or credit union. Most savings accounts are readily accessible, although federal regulations restrict the number of withdrawals that account holders can make in any given month.

CDs. Only about 7% of households save via CDs, in no small part due to the historically low rates CDs have offered since the 2008-09 recession.

Retirement Accounts. Retirement accounts such as 401(k) plans and individual retirement accounts, also known as IRAs, now comprise the lion’s share of American household assets that are considered savings. But unlike savings accounts and CDs, the rates of returns of these accounts are variable, as many of these account values are tied to retirement plans that offer investment options that may gain or lose value.

Under-Age-35 Households

The average amount of savings in the savings accounts of under-35 households is $4,659, according to data from the triennial Federal Reserve Survey of Consumer Finances. Under-35 households hold an average of $437 in CDs, and have $13,707 in retirement savings.

Households in this age range have less than half the amount those a decade older have in savings accounts and about a quarter of the amount the older group has in CDs and retirement accounts. The low savings balances may be because of the earning potential of the younger heads of households. Members of the under-35 group — the youngest age range in the survey — are likely to be just starting out in their careers and may not yet have realized much of their earning potential. They may also generally lack financial management experience and many may not have started saving for a “faraway” retirement.

The members of this age group may still be heavily burdened with student loan debt as they may be more recent graduates or still completing their education. Their entry-level salaries may not be large enough for them to save a substantial amount of money, afford a basic lifestyle and combat a heavy student loan debt burden.

Age 35-44 Households

The average savings of households between ages 35 and 44 is $11,568. These households also hold an average of $1,273 in CDs and have an average of $56,790 in retirement accounts, according to the Survey of Consumer Finances.

Households in this age range seem to be taking advantage of increasing earnings and putting away significantly larger balances in savings, CDs and retirement accounts than the previous age group.

These households may require more in emergency savings as their families grow and they incur additional food, shelter, child care and education costs. They may be setting aside funds in CDs for long-term savings goals such as purchasing a home, having children or paying for a child’s education. Retirement is a decade closer and it’s evident this age group has begun to stash away funds for their golden years, although they still have only about half the amount saved for retirement as those a decade older.

Age 45-54 Households

The average savings of households between ages 45 and 54 is $16,471. These households also hold an average of $2,498 in CDs and have an average of $128,927 in retirement accounts, according to the Survey of Consumer Finances.

Households in this age range have more than twice the amount in retirement savings than those a decade younger. But when it comes to savings accounts, there’s only a modest increase, suggesting that there’s only so much money families will store in a traditional savings account before finding more rewarding opportunities for their money.

Age 55-64 Households

The average savings of households between ages 55 and 64 is $21,141. These households also hold an average of $6,669 in CDs and have an average of $221,042 in retirement accounts, according to the Survey of Consumer Finances.

Households in this age range may already begin to draw down their retirement savings. Interestingly, they also seem to be the age where average balances in CDs jump the most, suggesting that some of these saving households may be trying to squeeze as much interest as possible out of at least some of their savings.

In conclusion

As the analysis shows, Americans seem to be putting significantly more money away in savings and retirement accounts as they age, but many are passing over CDs. The low interest rates CDs have offered since the 2008 recession may not have been worth it for a consumer to trade the temporary limited access to their savings. But that sentiment may soon change. The Fed recently raised the benchmark interest rate for the third time in 2018, which translates into higher, more attractive earnings on low-risk CDs in the near future.

Related Pages: savings accounts, 1-year CD rates, 5-year CD rates, banking tools and data
Comments
Bozo
Bozo   |     |   Comment #1
I've always been somewhat wary of statistics compiled by the FED on savings rates and totals. While the article cites "Source: Federal Reserve 2016", one can only imagine the source of the source. As an extreme example, let's assume I have $500,000 in a checking account. Unlikely, but conceivable. Would the FED count that as savings? Moreover, how would the FED even know I had $500,000 in a checking account? Moving right along, year-end IRA totals are reported to the IRS (as those in RMD territory know full well), but does the IRS share these totals with the FED? What about 401Ks? If someone (anyone) can point or link to an authoritative study on how the FED statisticians compile data on savers, I would be much obliged. As I am retired, I have more than enough time to become educated.
Barry
Barry   |     |   Comment #5
First of all Bozo, everything these days is in electronic form, including our money. I believe you have heard the expression that the banks and CUs sweep their money to the treasury overnight, in electronic form only (no money are actually sent) but the treasury books those money as theirs. Furthermore, every saving account has a code name and every checking account has different code name issued by the FEDs and whenever any money are sent to the treasury (overnight), those codes and amounts are put in d-base for analysis. I believe the FEDs can trace those money to a single individual using the d-base at the banks and CUs. Statistics are just a number extrapolated from any bank's d-base and there you have it, everything about you and the money you have anywhere are known to the authorities.

You can do an experiment yourself, just try to sent money to an unknown person or if you do not specify the receiver(s) SS# and the amount sent is over $10K, next morning you will have a visit from the secret service to be investigated.

My point of experience is this: everything about everybody is known in this country, NSA, FBI, secret service and a number of other agencies and the banks and the CUs are tracing every single move about any amount of money you interact with and NSA can even record the person's voice you agree to send the money to.

P.S. Ask yourself, why we have banking account numbers and look in your bank statements, checking, savings, MM, CDs and other deposits, they are with different length and different starting number, all those are associated with your money and sent to the treasury as proof that the bank and CUs actually had the real money to claim the interest on the sweep accounts.
dollarsncents
dollarsncents   |     |   Comment #6
Barry, I believe you nailed it. In today's computer age and advanced technology, the Fed knows more about all our personal finances than most people know about their own. That is why we are practically forbidden to deal in cash. It certainly isn't because we are all "money launderers".
fred oaks
fred oaks   |     |   Comment #28
Bozo, you don't have to "imagine the source," you can actually read the study and it will tell you the source.
#2 - This comment has been removed for violating our comment policy.
scottj
scottj   |     |   Comment #3
This seems fairly consistent to other articles I have read about the average persons saving. But for the most part the people who participate in this blog are far from the "average person". We are here because saving is a top priority  of ours and I'm sure well ahead of the average person.
Barry
Barry   |     |   Comment #34
Statistics and averages are totally misleading terms, take an example, there are two persons in a room, one has no money the other one has a cool million, the average wealth in that room is $500K per person. Statistics are for dummies.
deplorable 1
deplorable 1   |     |   Comment #4
This article makes me feel rich but also a bit alarmed that people don't have more savings than this. I guess this is a big reason why we had the financial crisis people don't have enough savings to get them through a job loss or rough patch. This is just another reason we need higher savings rates to encourage folks to save money in something other than a stock or retirement account in order to have quick access to cash in case of a emergency.
Dunmovin
Dunmovin   |     |   Comment #8
The cause of the financial crisis is “we didn’t have enough savings?” Really? The crisis was caused by greed...the Big D was caused by greed...the Big R was caused by creed. How can someone have “enough” when confronted with “this?” Cash is only as good as the person accepting...try pesos!
deplorable 1
deplorable 1   |     |   Comment #21
Just before the housing crisis the household savings rate dipped into negative territory for the first time. I was discussing this with Greg McBride over at Bankrate and we both knew instinctively that something bad was going to happen.
http://www.nbcnews.com/id/11098797/ns/business-stocks_and_economy/t/us-savings-rate-hits-lowest-level/#.W-QhJ9VKiHs
Then we had the housing crisis so yes not enough savings was a big part of the problem.
Barry
Barry   |     |   Comment #32
The tables above are misleading, most people have multiple accounts at multiple banks, CU, brokerage accounts, annuities, IRAs. 401k and many other savings and cash accounts. If you combine all of that under one SS#, the results will be double or triple than of those tables. Good number of people hold stocks, bonds, gold certificates or real gold and money abroad and when you include money stored under spouse's SS# and children accounts, you can quadruple the amounts from those tables.
fred oaks
fred oaks   |     |   Comment #33
If you are actually interested, there are separate studies of household wealth, which bozo also disputes without any basis.

No need to speculate.
RJM
RJM   |     |   Comment #7
I am well above average. Do I get a cookie?
#10 - This comment has been removed for violating our comment policy.
Barry
Barry   |     |   Comment #13
Something tells me, you are implementing a live poor die rich life style.
RichReg
RichReg   |     |   Comment #24
...and nobody wants to be the richest man in the graveyard,.. right?
john
john   |     |   Comment #9
our youth do not even know what a CD is ,how to invest ,what WALL ST is all abt REASONthey are not taught life skills ,ask your kid what 40% of 400 is or one hundred ten % of 10000 is THEY HAVE NO CLUE
Smitty in the City
Smitty in the City   |     |   Comment #11
the youth are the product of those that came before them
haves
haves   |     |   Comment #17
we got google
Dave
Dave   |     |   Comment #26
No, they are for the most part the product of a Dumbed Down educational system.
#12 - This comment has been removed for violating our comment policy.
Greg
Greg   |     |   Comment #16
The news is actually worse than the article suggests. The article talks of “average“ or mean savings. But these numbers are typically heavily skewed upward, because they include savings of billionaires and others of enormous wealth. The more relevant statistic is the median savings number. For example, of the Americans who have savings accounts, the median savings account balance is $5,200. The average, or mean balance is $33,766.49.
Mark275
Mark275   |     |   Comment #18
Thank you, that is more realistic. And it doesn't even include the fact that most of these people may have $150K mortgage, $50K signature loans, so they have $200K debt. If you have $200K debt and $35K in savings, you are Negative $165K
Rate Troll!!
Rate Troll!!   |     |   Comment #20
Exactly, been paying CASH for years except for bonuses!
deplorable 1
deplorable 1   |     |   Comment #37
Why spend cash when you can earn from 2-5% cash back for using rewards credit cards? Credit cards are just another financial tool for the well informed. You also get a 30 day 0% interest free loan every month. This assumes you can pay a bill in full and on time every month.
dollarsncents
dollarsncents   |     |   Comment #22
And there you have it. Good example, Mark.

Most of us "Baby Boomers" didn't spend it unless we had it, accept for maybe a modest home mortgage. Today most "Millennials" live from day to day on borrowed money.
Tazz
Tazz   |     |   Comment #23
These articles are funny. The kids go on vacations, hit the bars, have expensive iphones/data plans, and wonder why they have no savings.
alan1
alan1   |     |   Comment #25
Bozo -- re Comment #1 -- I will try to answer your question re study methodology with the seriousness you deserve, citing sources. I do not clam to have expertise in this matter, but I think you deserve better than to have your inquiry used as an excuse for the launching a deranged screed involving the Secret Service, NSA and others.

The Survey of Consumer Finances is, as it name suggests, a survey. Approximately 6500 families are interviewed. https://www.federalreserve.gov/econres/aboutscf.htm

Check out the 42 page article -- "Changes in U.S. Family Finances from 2013 to 2016: Evidence from the Survey of Consumer Finances" at https://www.federalreserve.gov/publications/files/scf17.pdf

See especially pp. 5-6 of the above-cited PDF, "Box 1. The Data Used in This Article"
The article appeared in Federal Reserve Bulletin, v. 103, no. 3, September 2017.

For more detailed information than what is contained into the article, go to https://www.federalreserve.gov/econres/scfindex.htm
That's the homepage for "Survey of Consumer Finances (SCF)". The opening paragraph states:

"The 2016 Survey of Consumer Finances (SCF) is the most recent survey conducted. Below are links to the bulletin article, historical bulletin tables, full public dataset, extract dataset, replicate weight files, and documentation."
Barry
Barry   |     |   Comment #30
A survey is not a proof of anything, you can take surveys in a rich area and a survey in poor area, the results are totally irrelevant.
Surveys are not factual statistics, they reflect a snap shot of that particular moment in certain geographical area and not the real state of affairs. When dealing with people, there is a significant intentional error in reporting the facts.

Furthermore, the cash in a possession of a person is not real money unless the other side accept it as real money.
The digitization of the value of the money is what makes them traceable. Try to buy anything with cash over $10K (unless you are dealing with the mafia), there is no market for the cash in your possession. Try to deposit that cash in any bank or CU, you will be interrogated like you are a criminal.

The point is this, every penny in every bank, CU, brokerage account and other instruments are known to the FEDs, IRS and the other authorities. Statistics can be extrapolated from anyone's activities when you deposit or transfer or withdraw any amount of money from any institution. The code associated with the money, reveals the type of the accounts you hold.
The surveys are just to justify the bureaucrats salary or non profits orgs that suck money from the taxpayers, I never believed in surveys not ever will.
Bozo
Bozo   |     |   Comment #38
alan1 (re comment # 25), I read the SCF shortly after it was published in 2017. As I am both a glutton for punishment and an arm-chair retired lawyer, I approached the study with an imaginary deposition in mind. Were I to hazard a guess, I would guess the statisticians at the FED used commonly-accepted statistical sampling. The real issue is what questions are asked of the persons sampled, if, indeed, any questions were asked at all. How one defines "savings" would be my first question to the statistician(s). As others have noted in this thread, socking away money in a savings account while loading up on debt is not a prudent definition of saving. Does the FED statistician track folks who leverage 0% credit card advances to plop money into 3% interest-bearing savings accounts? Does the FED track folks who pay down their mortgages? Or do the opposite (e.g., cash-out refis). As I believe I noted in another thread on a similar issue some time ago, a book which was required reading in my Stat 1 class many years was "How to Lie with Statistics". The chapter which has always stuck with me was entitled "The Over-Impressive Decimal Point."
fred oaks
fred oaks   |     |   Comment #39
BOZO, as you noted you have the time, why not read the study to learn how it was conducted?

instead of speculating, as you note, over several years?
Bozo
Bozo   |     |   Comment #40
re my comment #38, the penultimate sentence should have read "many years ago". Regrettably, Ken has not brought back the edit feature. Too great the sorrow.
alan1
alan1   |     |   Comment #41
Bozo - re Comment #38 -- please take the time to read the material re the Survey. For example, you write: " The real issue is what questions are asked of the persons sampled, if, indeed, any questions were asked at all."

Questions were asked. See the PDF of the Questionnaire Outline at https://www.federalreserve.gov/econres/files/scfoutline.2016.pdf

The above-cited PDF can be easily found by reading the home page for the Survey.
Bozo
Bozo   |     |   Comment #44
alan1 (re comment #41), I am tempted to say "seriously?", but I will assume the FED statisticians aren't just lying about the survey. First, I'd love to see the telephone records. As we all know, folks don't answer their landlines these days, assuming they even have landlines. Even if they answer, can you imagine who would slog through all these questions? Or even know the answers? Second, how were the polling subjects matched up to a survey? OK, we select 6500 subjects from a computer, then match them to a landline? Huh?

Alan1, I seem to remember I noted these issues several months ago. I have no more faith in the SCF now than I did then.
#27 - This comment has been removed for violating our comment policy.
fred oaks
fred oaks   |     |   Comment #29
What is the point? If I have $100 million in a taxable money market, and nothing in a retirement, CD or savings account, I will appear poor by this study.
Anon
Anon   |     |   Comment #36
Net worth and cash flow are far more important, both before and after retirement. Debt and savings averages are useful to economists, not individuals. Where you live and how you live will determine the true value of your "savings".
Milty
Milty   |     |   Comment #42
Regarding improving these savings/CD averages, I suggest taxing these earnings similar to dividends.
JimDavis
JimDavis   |     |   Comment #43
If anyone asks, I always tell people I'm broke. You will too if you're smart
Ann
Ann   |     |   Comment #45
Yes, that would be nice, they could treat it like a long-term dividend if you've had the account open more than a year. ;-)
anon
anon   |     |   Comment #46
Ordinary dividends are taxed the same as regular income. Capital gains rates are different.
https://smartasset.com/taxes/dividend-tax-rate
deplorable 1
deplorable 1   |     |   Comment #47
@Milty: Romney suggested removing the tax on interest all together which would have been nice particularly with such low rates.
@anon: Unless you hold your ordinary dividend paying stocks in a Roth IRA then you pay 0% tax on withdrawal subject to income and annual caps.

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