Retirement planning is a crucial aspect of financial well-being, and understanding the average retirement savings can provide valuable insights into achieving your own financial goals. In this comprehensive guide, we will delve into the average retirement savings in 2024, analyzing data from various sources and exploring factors that influence retirement savings.
Key Takeaways:
- The average median retirement savings for American households in 2022 was $87,000.
- Younger generations have significantly lower retirement savings compared to older generations.
- Education level plays a significant role in retirement savings, with individuals with higher education levels having significantly more saved.
- Race and ethnicity also impact retirement savings, with white Americans having higher average savings compared to Black and Hispanic Americans.
- Net worth is a major factor in retirement savings, with higher-net-worth individuals having significantly more saved.
- Retirement age varies widely, with many Americans retiring before reaching the full retirement age of 67.
Average Retirement Savings in 2024
According to the Federal Reserve’s 2023 Survey of Consumer Finances, the average median retirement savings for American households in 2022 was $87,000. This represents a significant increase from previous years, indicating that Americans are saving more for retirement than they did in the past.
However, it’s important to note that the average retirement savings is significantly higher than the median savings, indicating a large disparity between high and low earners. The mean retirement savings among Americans is over $333,940, which is significantly higher than the median. This highlights the importance of considering both the median and mean when analyzing retirement savings data.
Retirement Savings by Age
Retirement savings tend to accumulate significantly after the age of 35. The median retirement savings for Americans older than 35 years of age increases steadily every 10 years until they reach 75. This increase can be attributed to several factors, including the power of compounding interest, employer matching plans, and higher incomes resulting in more savings.
Here’s a table showing the average retirement savings by age in 2022:
| Age Group | Median Retirement Savings | Mean Retirement Savings |
|---|---|---|
| Younger than 35 | $18,880 | $49,127 |
| 35 to 44 | $45,000 | $141,517 |
| 45 to 54 | $115,000 | $313,220 |
| 55 to 64 | $185,000 | $537,563 |
| 65 to 74 | $200,000 | $609,229 |
| Older than 74 | $130,000 | $462,411 |
Retirement Savings by Education Level
Educational attainment has a significant impact on retirement savings. Individuals with higher education levels tend to have significantly more saved for retirement. In 2022, the median retirement account value for someone with a college degree was $141,700, compared to $50,000 for someone with no high school diploma.
Here’s a table showing the average retirement savings by education level in 2022:
| Education Level | Median Retirement Savings | Mean Retirement Savings |
|---|---|---|
| No high school diploma | $50,000 | $79,983 |
| High school diploma | $44,000 | $141,899 |
| Some college | $53,000 | $177,831 |
| College degree | $141,700 | $476,375 |
Retirement Savings by Race and Ethnicity
Race and ethnicity also play a role in retirement savings. White Americans tend to have higher average retirement savings compared to Black and Hispanic Americans. In 2022, the median retirement savings for white Americans was $100,000, compared to $39,000 for Black Americans and $55,600 for Hispanic Americans.
Here’s a table showing the average retirement savings by race and ethnicity in 2022:
| Race/Ethnicity | Median Retirement Savings | Mean Retirement Savings |
|---|---|---|
| White, non-Hispanic | $100,000 | $380,333 |
| Black, non-Hispanic | $39,000 | $117,527 |
| Hispanic | $55,600 | $120,318 |
| Other | $60,000 | $257,358 |
Retirement Savings by Net Worth
Net worth is a major factor in retirement savings. Individuals with higher net worth tend to have significantly more saved for retirement. The median retirement savings for households in the bottom 25% of net worth grew by $3,694 from 1989 to 2022. However, the median retirement savings for the top 10% of net worth grew by $789,332 during the same time period.
Retirement Age
The average retirement age in the United States is 63, but many Americans retire earlier or later. According to the Social Security Administration, 51% of Americans retire at age 61 or earlier, and 23% retire between 62 and 64 (before Medicare coverage kicks in at age 65). White Americans tend to retire later than Black or Hispanic Americans despite having more savings.
Understanding the average retirement savings can provide valuable insights into your own retirement planning. While the average retirement savings may seem daunting, it’s important to remember that everyone’s financial situation is different. The most important thing is to start saving early and consistently, and to adjust your savings goals as needed. By taking these steps, you can increase your chances of having a comfortable and financially secure retirement.
Additional Resources:
- How Much Do I Need to Retire?
- How Does a Roth IRA Work?
- How Much Money Should I Have Saved by 25?
- How Much Money Should I Have Saved by 35?
Keywords: average retirement savings, retirement planning, retirement age, retirement savings by age, retirement savings by education level, retirement savings by race and ethnicity, retirement savings by net worth
Frequently Asked Questions (FAQs)
1. How much should I save for retirement?
There is no one-size-fits-all answer to this question, as the amount you need to save for retirement will depend on your individual circumstances. However, a good rule of thumb is to aim to save 15% of your annual income for retirement over the course of your career.
2. When should I start saving for retirement?
The earlier you start saving for retirement, the better. This will give your money more time to grow through compounding interest.
3. What are the different types of retirement accounts?
There are many different types of retirement accounts available, including 401(k)s, IRAs, and defined benefit plans. Each type of account has its own advantages and disadvantages, so it’s important to choose the right one for your needs.
4. How can I increase my retirement savings?
There are many ways to increase your retirement savings, including contributing more to your retirement accounts, saving more of your income, and reducing your expenses.
5. What are the risks of not saving enough for retirement?
If you don’t save enough for retirement, you may have to work longer than you planned or you may not be able to maintain your standard of living in retirement.
6. What are some tips for saving for retirement?
Here are some tips for saving for retirement:
- Start saving early.
- Contribute as much as you can afford to your retirement accounts.
- Save more of your income.
- Reduce your expenses.
- Invest your retirement savings wisely.
- Review your retirement plan regularly.
7. What are some common mistakes people make when saving for retirement?
Here are some common mistakes people make when saving for retirement:
- Starting too late.
- Not contributing enough to their retirement accounts.
- Spending too much money.
- Not investing their retirement savings wisely.
- Not reviewing their retirement plan regularly.
8. What are some resources that can help me save for retirement?
There are many resources available to help you save for retirement, including the Social Security Administration, the Internal Revenue Service, and the Department of Labor. You can also find helpful information on retirement planning from financial advisors and online resources.
By percentile of net worth
Average retirement savings by net worth
It’s no surprise that higher-net-worth-individuals have more retirement savings. During the past 30 years, there has been a noteworthy disparity in the growth of retirement savings between individuals with higher net worth and those with lower net worth.
Since 201989, the median retirement savings among the wealthiest 10% of individuals has increased by more than 700%.
In the meantime, those who are among the lowest 25% of earners in terms of net worth have only seen a 0% increase in net worth, demonstrating that rising income inequality has long-term effects that persist even after Americans finish working.
The disparity becomes even more alarming when one takes into account that the people in the lowest 25% of net worth had a median retirement account valued at $2,306% in 201989, while the people in the highest 10% of net worth had a median retirement account valued at $107,668.
A change in the bottom 25% for the year 2016 only resulted in an increase of $3,694% in retirement savings. For the top 10%, median retirement savings grew by $789,332.
Average retirement savings by percentile of net worth (median)
| YEAR | LESS THAN 25TH PERCENTILE | 25TH TO 49.9TH PERCENTILE | 50TH TO 74.9TH PERCENTILE | 75TH TO 89.9TH PERCENTILE | 90TH TO 100TH PERCENTILE |
|---|---|---|---|---|---|
| 1989 | $2,306 | $8,531 | $23,056 | $57,640 | $110,668 |
| 1992 | $2,072 | $8,702 | $27,557 | $60,709 | $155,398 |
| 1995 | $2,323 | $13,935 | $31,741 | $67,740 | $193,543 |
| 1998 | $3,829 | $14,769 | $51,053 | $109,400 | $233,387 |
| 2001 | $3,348 | $12,555 | $50,222 | $133,925 | $334,813 |
| 2004 | $4,714 | $18,384 | $53,423 | $152,414 | $421,102 |
| 2007 | $4,293 | $21,465 | $71,550 | $171,720 | $453,341 |
| 2010 | $6,829 | $16,390 | $55,998 | $181,650 | $564,072 |
| 2013 | $6,110 | $15,274 | $66,187 | $210,017 | $572,775 |
| 2016 | $5,303 | $18,501 | $64,135 | $244,207 | $778,257 |
| 2019 | $5,448 | $22,025 | $67,929 | $222,567 | $811,444 |
| 2022 | $6,000 | $22,380 | $80,000 | $269,000 | $900,000 |