Average Retirement Savings in the U.S.

By Mike Obel | AUG 30, 2023

When you're saving for retirement, it can be helpful to know how your peers are doing to see where you stand. The problem? With so many sources of retirement data at our fingertips, it can be challenging to pinpoint accurate, representative statistics. The Federal Reserve, for example, tracks both median and average retirement savings. While the two sets of numbers vary wildly from each other, they can help you assess your own progress. A financial advisor can work with you to create a savings plan for your retirement needs and goals.

Average Retirement Savings By Age

It can’t be stressed enough that too many of us aren’t even saving for retirement. According to the Federal Reserve, one in four Americans have no retirement savings. Taking them and people who aren’t saving enough into account, the Employee Benefit Research Institute estimated the retirement savings deficit to be $3.68 trillion in early 2020. That means all U.S. households (with a head of household between the ages of 25 and 64) have a total $3.68 trillion less in savings than they should have for retirement.

The Federal Reserve’s triennial Survey of Consumer Finances found that the median retirement account balance in the U.S. – looking only at those who have retirement accounts – was just $65,000 in 2019, and the conditional mean balance was $255,200. Updated results will be released by late 2023. 

So how do retirement savings vary across age groups? Here’s a look at the median and average account values for six different age brackets, according to Vanguard’s How America Saves 2022 study:

Age Group	Median Retirement Account Value	Average Retirement Account Value
24 and under	$6,264	$1,786
25-34	$37,211	$14,068
35-44	$97,020	$36,117
45-54	$179,200	$61,530
55-64	$256,244	$89,716
65 and up	$279,997	$87,725

As you can see, the 65-and-up age group has the most robust retirement savings, followed by those who are between 55 and 64 years old. 

On average, Americans have saved 78% of what they need for retirement, according to a Fidelity Investment study released in March 2023. That percentage is down from the firm’s 2020 study that found Americans on average had saved 83% of what they need for retirement.

How Much Should You Save for Retirement?

Of course, how much other people have in savings doesn’t answer the all-important question that you’ll inevitably ask while planning for your own retirement: how much do I need to save?

The good news is there are several rules of thumb that can help you answer this question for yourself. Here are three common rules that could guide your savings:  

4% Rule

The “4% Rule” is perhaps the most well-known retirement planning strategy. It stipulates that a retiree should save enough to withdraw 4% in their first year of retirement and then adjust subsequent withdrawals for inflation. By doing so, the rule suggests, the retiree will have enough money to last 30 years. For example, if a woman anticipates needing $50,000 per year in retirement income to support her lifestyle, she would need to save $1.25 million by the time she retires. She would then tweak her annual withdrawals to match the rate of inflation. 

While the 4% Rule has been a staple of retirement planning since its development in 1994, the popular strategy has drawn criticism from some experts who note that retirees’ expenses may vary from year to year. Withdrawing 4% in the first year of retirement may not be sufficient to cover certain variable costs. As a result, newer guidance suggests retirees withdraw 4.5% or 5% in their initial year of retirement. Then again, even a 4% withdrawal rate in the first year may be too high if the market is in a down cycle, leading to sequence of returns risk. 

The rule also assumes a retiree’s portfolio is split evenly between stocks and bonds, an asset allocation that may not apply to all portfolios. 

Fidelity’s Rule of Thumb

Another popular strategy for retirement planning is having 10 times your final income saved by age 67. This rule of thumb recommended by Fidelity Investments provides clear, actionable goals for those saving for retirement. To have 10x your income saved by age 67, you should look to meet the following savings goals:

Age	30	35	40	45	50	55	60	67
Savings Goal	1x	2x	3x	4x	6x	7x	8x	10x

Fidelity notes these savings goals are ambitious and may not be attainable for everyone. They are also based on the assumption that you will begin saving for retirement by age 25 and save 15% of your annual salary each year. 

45% Rule

The 45% Rule, another guideline from Fidelity, dictates that a retiree’s nest egg should be large enough to replace 45% of his or her pre-retirement, pretax income each year. Social Security supplements the remainder of a retiree’s spending. 

As a result, a person who earned $100,000 per year would need to have enough in savings to withdraw $45,000 per year for the rest of his or her life. Assuming the person lives another 25 years after retirement, they would need $1.125 million in retirement savings. 

Then again, the 45% Rule may overestimate the future viability of Social Security. With the Social Security trust fund due to run out of money by 2033, the government would only be able to pay out 76% of benefits if changes to the system are not implemented. While it’s unlikely that lawmakers will allow the trust fund to be completely depleted, it remains a possibility without Congressional action. 

Bottom Line

Knowing how much your peers have saved for retirement can help you track your own progress, but it shouldn’t be all that’s guiding your plan. According to Federal Reserve data gathered in 2019 as part of the Survey of Consumer Finances, the average retirement savings was $255,200 while the median was $65,000. How much you’ll need to save will ultimately depend on how much you plan to spend in retirement and how long you expect to live. 

Retirement Planning Tips

• Anticipating how much you’ll receive in Social Security benefits can help you better plan for retirement. SmartAsset’s Social Security Calculator can help you estimate how much your benefits will be based on your age, income and when you plan to start collecting.
• A financial advisor can be a valuable resource for retirement planning. Finding one doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three vetted financial advisors in your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Photo credit: iStock.com/LaylaBird, iStock.com/Srdjanns74