The average American has less than $90,000 in retirement savings, as of mid-2023. That’s far below what many people will likely need, and many Americans aren’t really sure what sorts of goalposts or milestones they should be striving for by certain ages when it comes to saving for retirement.
It can be helpful to see how one compares to others in their age range. Averages can help investors see if they are on track to retire when they plan to. While each person is different in terms of their personal retirement goals, lifestyle, ability to save, and projected expenses, setting goals and benchmarks can help an individual figure out how much to save and where to put money for retirement.
Key Points
• The average American has less than $90,000 in retirement savings, which is less than what many people will likely need.
• Retirement savings vary by age group, with average savings increasing as people get older.
• By age 30, it’s generally recommended to save an amount equal to annual salary, and by age 40, three to four times annual salary.
• By age 50, it’s advised to have six times annual salary saved, and by age 60, eight times.
• Most Americans aren’t saving enough for retirement, and it’s important to create a retirement plan and consider personal goals and financial responsibilities.
Average Retirement Savings By Age
Below is a breakdown of retirement savings by age group, ranging from people in their 20s to people in their 70s.
| Age Group | Average Retirement Savings |
|---|---|
| 20s | $35,800 |
| 30s | $67,400 |
| 40s | $77,400 |
| 50s | $110,900 |
| 60s | $112,500 |
| 70s | $113,900 |
Average Retirement Savings in Your 30s: $67,400
Most Americans in their 20s and 30s haven’t reached their peak earning years, and many might be paying off student loans, and saving up to buy a house or have kids. Retirement isn’t always top of mind. But the earlier people can figure out which retirement plan is right for you and commit to actually starting a retirement savings plan, the more they will benefit from compound interest over time.
Recommended: How to Save for Retirement at 30
Average Retirement Savings in Your 40s: $77,400
Since most people are making more money at this age than they ever have, it can be tempting to spend it on fancy vacations, cars, and other things. Many people also have mortgages, families, and other big-ticket expenses during this time in their lives as well.
But those who put that money towards retirement may be able to reach their goals early and retire relatively young.
For men, these are peak earning years, as they tend to continue increasing their earnings until age 55. Women tend to reach their peak earnings much younger at age 44. Either way, retirement savings should be top of mind for people in this age group.
Average Retirement Savings in Your 50s: $110,900
At this age, some Americans are on track to reach their retirement goals, while others are far off. There are still ways to catch up, such as cutting unnecessary expenses, moving to a smaller home, or putting any additional pay, income, or bonuses into retirement accounts.
Average Retirement Savings in Your 60s: $112,500
Although the goal for many is to retire at around 60, many Americans have to keep working since they don’t have enough savings. In some cases, people plan on working at this stage of life anyway, so it’s not a bad thing. A lot of people work during retirement, although some do so out of necessity.
Ideally, working in later years of life is a choice and not a necessity. After this age, people tend to be spending rather than saving, so the average retirement savings amounts decline.
Retirement contributions tend to increase as people age partly because they are earning more and partly because they are thinking about retirement more.
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Ideal Retirement Savings Amounts by Age
Because the cost and standard of living varies so greatly, there aren’t clear dollar figure amounts that each age group should aim to have saved for retirement. But there are suggested guidelines.
• By age 30: It’s generally recommended that people save an amount equal to their annual salary by the time they reach age 30. That may not be a realistic goal for many people, but it can be a general guideline or goal to aspire to.
One way to achieve this is to save 10-15% of one’s gross income starting in their 20s. Some employers will match retirement contributions if employees save a certain amount each month, so it’s a good idea to contribute at least that much to take advantage of what is essentially free money.
• By age 40: It’s recommended that investors have three to four times their annual salary saved by age 40.
• By age 50: Investors are typically advised to have six times their salary saved by age 50.
• By age 60: It’s recommended that investors have eight times their salary saved by age 60.
• By age 67: Investors are typically advised to have ten times their salary saved by age 67. For example, if a 67 year old makes $75,000 per year, they should have $750,000 saved.
Is Anyone Saving Enough for Retirement?
Despite the above recommendations, most Americans don’t have nearly these amounts in their retirement accounts. A significant portion of Americans don’t have any retirement savings at all — and that includes Americans who are near retirement age. In a recent SoFi survey of adults aged 18 and over, 59% had either no retirement savings or less than $49,000.
So, while some people are saving enough for retirement, a lot of people aren’t. Social Security may not be enough for a lot of people to make ends meet, either.
Social Security and Your Retirement
It’s more important than ever to create a retirement plan and stick to it, because America is facing a retirement crisis. Social Security was designed to help people pay their expenses during retirement, but it currently pays less than half of the average retiree’s monthly expenses. As of mid-2023, the average Social Security payment is around $1,800 per month.
In addition, people have different perspectives about Social Security. According to SoFi’s recent retirement survey, some adults think it will be their main source of income in retirement, while others see it as a supplement to other income sources. And some people aren’t counting on Social Security at all.
Perceptions of Social Security Perceptions in Retirement
• 41% Perceive SS as a supplementary source of income
• 31% Perceive SS as a their primary source of income
• 16% Aren’t relying on SS as a source of income
• 12% Aren’t sure how to perceive SS in their retirement plans
Source: SoFi Retirement Survey, April 2024
Best Ways to Save for Retirement
It can be stressful to feel behind on saving for retirement, but it’s never too late to start.
There are several ways to save for retirement — but a good place to start, if you haven’t already, is by creating a budget to track expenses. This allows you to see where your money is going and identify categories of spending that could be reduced, with the money redirected to a retirement savings account.
Some retirement plans also have catch up options for those who start late — typically, individuals older than 50 can contribute extra funds to their retirement accounts.
No matter how much you put aside for retirement, or whether you contribute to a traditional IRA or a Roth IRA, a 401(k) or an after-tax investment account, a good strategy is to automate savings. With automated savings, the money is deducted from your paycheck or your bank account automatically — making it easy to forget that the money was ever in the account in the first place.
The Takeaway
The average American has less than $90,000 in retirement savings, though the number varies depending on age groups and other factors. Knowing how much others in your age group are saving for retirement can help give you a sense of comparison, but it’s important to remember that most Americans aren’t saving enough.
There are a number of different formulas, calculations, and rules of thumb to help individuals figure out how much money they’ll need in retirement. While these figures can be helpful, it’s also important to take personal goals, financial responsibilities, and lifestyle into consideration.
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