The Federal Reserve conducted its latest Survey of Consumer Finances (SCF) in 2022 and published the results in October 2023. The triennial report provides an overview of income, assets, liabilities, and net worth across American households.
Within assets, the SCF gives details on retirement accounts, but most people have additional retirement savings in other investment vehicles. So, readers looking to compare their financial status to that of their peers should also consider savings kept in certificates of deposit and bonds, as well as savings invested in stocks and index funds held outside of traditional retirement accounts.
The terms "average" and "mean" are often used interchangeably, but statisticians define average as a broad term encompassing three measures of central tendency: mean, median, and mode. Each metric is useful in different situations, but median is generally most appropriate when dealing with asymmetric data like financial information.
The median is simply the middle value in a data set. It is also called the 50th percentile, because half of the numbers in a given data set fall above the median, and the other half fall below the median. With that it mind, read on to see an age-based breakdown of Americans' retirement savings across different asset types.
The median savings in retirement accounts: $87,000
The Federal Reserve SCF defines retirement accounts as individual retirement accounts (IRAs), Keogh accounts, and employer-sponsored accounts like 401(k) plans, 403(b) plans, and thrift savings accounts. About 54% of SCF participants had money invested in retirement accounts in 2022.
The chart below details the conditional median retirement account balance among American households, meaning it excludes households that did not have retirement accounts. The information is broken down by age of the reference person, defined as the male in mixed-sex couples and the older individual in same-sex couples.
Age | Median Savings in Retirement Accounts |
|---|---|
Less than 35 | $18,880 |
35-44 | $45,000 |
45-54 | $115,000 |
55-64 | $185,000 |
65-74 | $200,000 |
75 and older | $130,000 |
All households | $87,000 |
Data source: Federal Reserve 2022 Survey of Consumer Finances.
As shown above, American households reported a median retirement account balance of $87,000. That means half of households had more money in retirement accounts, and half had less money in retirement accounts.
Not surprisingly, the median retirement account balance increased with age, and it reached a peak among individuals aged 65 to 74. Thereafter, it declined because individuals were withdrawing money during retirement. That pattern repeated itself (more or less) with the other assets types discussed in this article.
The median savings in certificates of deposit (CDs): $26,000
Certificates of deposit, commonly called CDs, are fixed-income investments offered by banks and credit unions. They pay a predetermined interest rate over a specific period, and must either be cashed or renewed upon reaching maturity. About 7% of SCF participants had money invested in CDs in the 2022, according to the Federal Reserve.
The chart below details the conditional median CD balance among American households based on the age of the reference person.
Age | Median Savings in Certificates of Deposit |
|---|---|
Less than 35 | $10,000 |
35-44 | $10,000 |
45-54 | $14,000 |
55-64 | $25,000 |
65-74 | $53,000 |
75 and older | $33,000 |
All households | $26,000 |
Data source: Federal Reserve 2022 Survey of Consumer Finances.
As shown above, among American households that owned CDs, the median balance was $26,000 in the Federal Reserve's 2022 SCF.
The median savings in bonds: $211,000
Bonds are debt securities that pay a fixed interest rate until maturity. Just 1% of SCF participants reported owning bonds in 2022, according to the Federal Reserve.
The chart below shows the conditional median value of bond investments across American households based on the age of the reference person. The dollar totals refer to bonds held directly, meaning sources of indirect exposure -- like bond funds held in brokerage accounts or retirement accounts -- are excluded.
Age | Median Savings in Bonds |
|---|---|
Less than 35 | $20,000 |
35-44 | $45,000 |
45-54 | $265,000 |
55-64 | $400,000 |
65-74 | $322,000 |
75 and older | $236,000 |
All households | $211,000 |
Data source: Federal Reserve 2022 Survey of Consumer Finances.
As shown above, among American households that owned bonds, the median investment value was $211,000 in the Federal Reserve's 2022 SCF.
The median savings in stocks: $15,000
Stocks were the second-most commonly held asset in the 2022 SCF. Precisely 21% of participants reported owning stock, according to the Federal Reserve.
The chart below shows the conditional median value of stock investments across American households based on the age of the reference person. The dollar totals refer to stocks held directly in brokerage accounts, meaning other source of ownership -- lik pooled investment funds and retirement accounts -- are excluded.
Age | Median Savings in Stocks |
|---|---|
Less than 35 | $2,500 |
35-44 | $12,000 |
45-54 | $11,000 |
55-64 | $30,000 |
65-74 | $65,000 |
75 and older | $100,000 |
All households | $15,000 |
Data source: Federal Reserve 2022 Survey of Consumer Finances.
As shown above, among American households that reported owning stocks, the median account value was $15,000 in the Federal Reserve's 2022 SCF.
The median savings in pooled investment funds: $150,000
Pooled investment funds include bond funds and stock funds, such as mutual funds, index funds, and real estate investment trusts. About 12% of SCF participants had money in pooled investment funds in 2022, according to the Federal Reserve.
The chart below shows the conditional median valued of pooled investment funds across American households based on the age of the reference person.
Age | Median Savings in Pooled Investment Funds |
|---|---|
Less than 35 | $24,000 |
35-44 | $80,000 |
45-54 | $175,000 |
55-64 | $300,000 |
65-74 | $250,000 |
75 and older | $356,000 |
All households | $150,000 |
Data source: Federal Reserve 2022 Survey of Consumer Finances.
As shown above, among American households that owned pooled investment funds, the median value was $150,000 in the Federal Reserve's 2022 SCF.
In closing, some readers may be disappointed with their own financial status after reviewing these figures. But anyone can improve their net worth and increase their retirement savings with prudent budgeting and smart investments. The only secrets are dedication and patience.
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Here's the Average Retirement Savings for Americans by Age was originally published by The Motley Fool