What Is the Average Retirement Savings Balance by Age?

Saving for retirement is essential, but rising costs have made it challenging. Recent CNET research shows that one-third of Americans have been saving less for longterm goals due to higher everyday expenses.

If you’re wondering whether you’re on track to meet your retirement needs, it can help to know how much the average person has put aside. And once you know how you stack up against your peers and neighbors, you can explore new rules for your money to help you be better than average -- and maybe even reach retirement earlier.

Read on to learn how much the typical American has saved up for retirement and what you can do to feel more confident about your nest egg.

What is the average retirement savings balance?

The average retirement savings balance among all Americans with a retirement account is $352,178, as of the Federal Reserve’s most recent Survey of Consumer Finances. The latest data is from 2022, so keep in mind these figures will look different today.

It’s also important to keep in mind that the average figure is skewed by older Americans who have managed to save for much longer and enjoyed the power of compound interest.

Additionally, these figures reflect people in each age bracket who actually have dedicated retirement savings accounts such as IRAs and/or 401(k) plans. Less than 55% of people have those types of retirement savings accounts, according to the SCF -- which means there are plenty of Americans who don’t have money set aside for their post-working futures.

If you’re trying to figure out how your retirement savings compare, the average isn’t always the best indicator. Many financial experts prefer to look at the median, which indicates the middle marker -- half of people have more, and half of people have less.

The median retirement balance among all age groups is much lower than the average amount -- $115,640 as of 2022. Here’s a rundown of the median retirement savings by age for those with dedicated retirement savings accounts.

How much should you save for retirement?

Though retirement savings data might be helpful in telling the story of how financially ready (or not ready) people are to stop working, these figures won’t help you find the magic figure you need for retirement. 

“Every family has a different number,” says Casey T. Smith, president of Georgia-based Wiser Wealth Management. For example, large families with a lot of needs and hobbies are going to have a different financial target than a small family without as many pastimes. 

Still, there are some goalposts you can set. According to Smith, you should be able to save at least 10% of your income in your 20s. Try to increase that to 15% of your income in your 30s. If you’re just getting started in your 40s, try to save 25%. 

To figure out how much you’ll need for your retirement, schedule a meeting with a financial adviser so you can get some professional assistance in making your plan. And think about the answers to these questions before you do. 

• Where do you plan to live? If you’re comfortable downsizing and moving to a more affordable destination, you might be able to save some cash to cover additional expenses. You’ll also need to consider property tax bills. Even if you’ve managed to pay off your mortgage, you’re going to need to budget for your property tax installments, which vary widely across the country.

• What do you want to do every day? If your idea of the good life is going on hikes and reading, you won’t have as many demands on your bottom line. If you want to play a round of golf each morning and spend a week of each month traveling somewhere new, though, you’ll need a significantly bigger cushion.

• How long do you think you’re going to live? There is no crystal ball here, of course, and it can be a daunting question to consider. However, it’s helpful to think about your family history as well as your health. You might end up spending money longer than the average person.

Forms of retirement savings

401(k): A 401(k) is an employer-offered plan that allows you to start saving for retirement and reduce your taxable income. For example, if you earn $70,000 this year and you contribute $10,000 to your 401(k), you will only pay taxes on a $60,000 income (although you’ll pay taxes on the money in your 401(k) when you eventually withdraw the funds). Many employers offer 401(k) matching programs that contribute additional money up to a certain percentage amount.

IRAs: IRA stands for Individual Retirement Account, and there are two types to choose from: a traditional IRA, which offers some tax advantages in the here and now, and a Roth IRA, which allows tax-free withdrawals in the future but comes with some salary limitations. Regardless of which you choose for your specific financial situation, IRAs are a nice option for self-employed individuals, and they can make a solid addition on top of a 401(k).

Social Security benefits: If you’re earning an income and paying Social Security taxes, you’ll be eligible for Social Security benefits down the road. You can start taking Social Security payments as early as 62, but if you want to receive a maximum benefit, it’s wise to wait until you reach your full retirement age. If you were born after 1960, your full retirement age is 67. 

At what age do most people retire?

According to research from Gallup, the average retirement age is 61, a four-year increase since it started collecting data in 1991. Looking ahead, people are planning to work even longer. In fact, the average retirement age of people who are currently working is 66. And, according to data from the Bureau of Labor Statistics, the number of people 75 and older in the labor force is projected to grow by 96.5% by 2030.

Data from the Federal Reserve and other sources shows that retirement age varies based on race/ethnicity and overall level of education. 

Why are Americans struggling to save for retirement?

According to recent research from Fidelity, 52% of households are at risk of not being able to cover essential expenses in retirement. Plenty of them are aware of the risk, too. A study from AARP shows that 61% of people are concerned they won’t have enough money to support themselves in retirement.

Part of the struggle to save comes down to basic math. While every financial expert says you should set aside a portion of your paycheck for the future, the reality is that the majority of Americans are having a tough time making ends meet. If you’re living paycheck to paycheck, saving money from any of those paychecks is very hard to do. Additionally, many Americans are stretched thin with debt payments. Between paying off a mortgage, auto loan, student loans and credit card bills today, there’s not much left over for tomorrow.

Social Security benefits are critical for retirees, making up approximately 90% of income in around 25% of households of people 65 and older. However, that doesn’t mean you should count on Social Security as your only source of income for your future. 

The reality is that Social Security will probably only cover a portion of household needs, according to Wiser Wealth’s Smith. “Saving for your future self through a 401(k) or an IRA is necessary to cover everything else.”

To get a sense of the kind of Social Security benefits you can expect to receive, use this calculator.

Tips to save for retirement

In order to not rely solely on your Social Security benefits down the road, take whatever steps you can now to boost your retirement fund. Consider these tips from Paul Deer, vice president of Wealth Private Client at Empower.

First, max out your 401(k). If your employer offers a matching program for your retirement savings, take advantage of this feature since it’s part of your compensation as an employee. “Contribute to your 401(k) at least as much as is required to receive your employer match,” Deer says. “If you don’t, it’s like leaving free money on the table.”

Second, leave your retirement funds untouched until you actually retire. There are loads of temptations to dip into retirement money, but don’t give in, and avoid taking early withdrawals. “Try to think of your retirement savings accounts like a pension,” Deer says. “People working toward a pension tend to forget about it until they retire. While that money is locked up until later in life, it becomes a hugely powerful resource in retirement.”

Next, keep your spending in check. Deer looks at saving for retirement through a similar lens of building net worth. To build net worth -- meaning the difference between your assets and your debts and liabilities -- focus on saving for tomorrow versus spending for today. Some families are tempted to “keep up with the Joneses” and resort to excessive purchases as incomes go up. But while it’s OK to enjoy the fruits of your labor, Deer recommends keeping unnecessary expenditures in check. 

Lastly, talk to a professional. You can read loads of advice about retirement, but developing a financial strategy isn’t always best with a DIY approach. “Be honest with yourself about how much time you want to devote to learning about your 401(k) and organizing your financial goals,” Deer says. One way to make sure you’re on track is to work with a financial professional who can show you the way. 

The bottom line

It’s objectively hard for many to save for retirement. But setting yourself up for the distant future is one of the most important things you can do. No matter how old you are and how your cushion stacks up to the average retirement savings balances, now is the time to get started.