Data Reveals Retirement Savings by Age. How Does Your Retirement Savings Compare?
Retirement planning can be daunting for Americans. The big question for many, regardless of age, is how much money one needs to save before leaving the workforce.
It’s difficult to know where to begin with retirement planning and a meeting with a financial consultant is always a good start. However, recent data from U.S. News & World Report shows how other Americans are faring in the quest to make enough money to retire comfortably.
U.S. News & World Report makes it easy to see how much Americans have saved for retirement by age in both savings accounts and 401(k) accounts. Are you on track with your retirement savings compared to the rest of the country?
Counting Retirement Savings Accounts
U.S. News & World Report used data from the Federal Reserve System to break down how much money Americans have in their retirement accounts. The numbers are from 2022, which is the latest year the data has been made available.
According to The Motley Fool, the median amount American households have in their retirement savings regardless of age is $87,000. But if you fall within a certain age range as detailed on the list provided by U.S. News & World Report, you might be curious to find out if you’re currently on pace with the rest of the U.S. in terms of how much you have in your retirement savings account.
Younger Than 35
Average retirement account balance: $49,130
35 to 44 Years Old
Average retirement account balance: $141,520
45 to 54 Years Old
Average retirement account balance: $313,220
55 to 64 Years Old
Average retirement account balance: $537,560
65 to 74 Years Old
Average retirement account balance: $609,230
75 and Older
Average retirement account balance: $462,410
Analyzing 401(k) Balances
U.S. News & World Report also provided data on how much money Americans have in their 401(k) savings account as broken down by age ranges by looking at data from the Federal Reserve System. The results were also based on data from 2022, which was the most recent year the information has been made available.
In 2021, a report showed that the average 401(k) balance for all Americans was approximately $141,000. The list provided by U.S. News & World Report might make you think twice about whether or not you’re making the right choices with your 4010(k), depending on your age.
Younger Than 25
Average 401(k) account balance: $5,236
25 to 34 Years Old
Average 401(k) account balance: $30,017
35 to 44 Years Old
Average 401(k) account balance: $76,354
45 to 54 Years Old
Average 401(k) account balance: $142,069
55 to 64 Years Old
Average 401(k) account balance: $207,874
65 and Older
Average 401(k) account balance: $232,710
Start Saving Early
The average age of retirement varies between states and the District of Columbia. West Virginia and Alaska’s average retirement age is 61, the lowest in all 50 states and the District of Columbia (D.C.). On the opposite end of the spectrum, D.C. has the highest average retirement age, hovering at 67.
When it comes to which states have the highest annual cost for retirement, Hawaii ranks first with approximately $120,000 needed a year to pay for essentials like groceries, housing, health care, and utilities. Mississippi ranks as the state with the lowest annual cost of retirement, with about $46,000 needed for essentials per year.
Maximizing Retirement Benefits
The age when Americans receive their full Social Security retirement benefits varies depending on when they were born. For those born in 1955, the full benefit age is 66 years and 2 months, and the age gradually rises for those born in 1960 or later.
Each year after the official full-benefit Social Security age starts until 70 years old, Americans receive a yearly benefits increase of 8% if they choose to delay benefits.
Plan to Retire Early
With so many Americans saving the most money in a retirement account later in life, early planning is vital to take better advantage of compound growth. Those wanting to retire early need to double down even more. Experts suggest those wanting to retire early to invest in real estate, create a mock retirement budget, and meet with a financial advisor.
Financial professionals warn that a key step to early retirement is to pay off mortgages and any other debt before retirement. Insurance is also a major factor to consider; its estimated retirees spend $700 per month on insurance, but that number can rise if long-term care is needed.
Most to Least Expensive States To Retire
Are you hoping to settle down in a cheaper state during retirement? These are the states to consider and, equally important, those you’re better off avoiding.
Most to Least Expensive States to Retire Ranked From 1 to 50
11 Things That Disappear When You Retire
A survey by Lincoln Financial Group says 60% of retirees would go back in time if they could and change how they planned their retirement during their working years. Whether for better or worse, these are some of the things that disappear upon retiring.
