Complete Average Retirement Savings by Age Guide

Saving for retirement is something that many people put off until it becomes difficult for them to make up for lost time (and money). In order to avoid finding out that you do not have enough to get by (or simply maintain your standard of living) in your “golden years,” it is important to know exactly where you stand and where you should be financially in order to make any necessary changes as early as possible.

By taking the time now to find out how much you will need to have saved and figure out what you have to do to get there, you can have peace of mind that your financial future is as secure as possible.

In This Guide

Average Retirement Savings by Age

Income and savings can be taboo subjects that many people avoid asking about or discussing. This can make it difficult figure out if you’re on the right track or even in the right ballpark. Thankfully, there are organizations that research and analyze anonymous financial data to determine and report on and the state of salaries, expenditures, savings, etc. It is important to note that the following statistics represent the current state of workers’ retirement savings and do not represent the ideal or target level of savings for each age group.

TransAmerica’s 2015 Annual Retirement Survey (based on 4500 online interviews) found that the median total household savings by age were as follows:

AgeAmount Saved

If you look at things from the standpoint of their savings accounts, it is obvious that many will not have a large enough nest egg to even meet basic expenses (if they expect to live anywhere near 15 years after retirement). Many others will live close to the poverty line.

Of course pensions and Social Security are two other primary sources of retirement income, but both have seen shrinkage in the last few years. Even when these factors are considered, the statistics suggest most people should save more to ensure that they will still be able to enjoy their senior years. Add to this that the life expectancy for someone retiring this year could be as high as 85 for men and 87 for women (currently 79 and 81 respectively) and you have an additional 6 years of retirement you might need to save for. It might be helpful to note that the average retirement age is currently 62 and a typical length of retirement is 18 years.

The Employee Benefit Research Institute (EBRI) publishes an annual report of their findings from their Retirement Confidence Survey. The survey came to two main conclusions: that Americans are living longer on average and that they don’t have enough saved up for retirement.

According to the 2015 report, 28% of workers have less than $1000 saved:

Amount% of Workers
< $100028%
$1000 to $1000017%
$10000 to $2500012%
$25000 to $500009%
$50000 to $10000010%
$100000 to $25000010%

Income Example

For example, even if a senior was to retire with the $100,000 in savings listed in the table above, retired at 65 and lived until they were 85, which following the 4% safe withdrawal rule, would only mean $4,000 a year (not taking inflation or today’s negligible interest rates into account). Add to that a private pension of $10,000 and average monthly social security benefit of $1,341 ($16,092 per year) in 2016 (according to the U.S. Social Security Administration), this adds up to $31,092 which is considerably less than the average household income in the US of $51,939 in 2013.


Overall, the EBRI survey found that 57% of workers report having less than $25,000 in household investments and savings (not counting home and pension benefits). Older individuals had more saved up, but this average much lower than it should be. In fact, the percentage of those reported having saved anything for retirement is at 67% which is down from 75% in 2009. Another recent study by Fidelity Investments predicts that baby boomers will fall about 44% short on average of the requirement income they require.

Not surprisingly, only 22% of workers are very confident that they’ve saved enough for a comfortable retirement (this is up from 13% in 2013 however). Many of them have never actually sat down and calculated their retirement finances. In fact, the EBRI reported that only 46% of those surveyed said that they and/or their spouse have calculated how much they need to have saved up in order to live comfortably during retirement.

How Much do You Need to Retire?

If you are anywhere near the average for your age group, then you are not saving enough and you need to rethink your strategy to ensure that you have at least the minimum recommended amount. That said, there is no target amount that is right (and attainable) for everyone. There are number of different factors that can affect how much you need to save (these are questions you should ask yourself while planning).

  • What age do you plan to retire?
  • What will your lifestyle be?
  • Do you want to travel?
  • What will the cost of living be in that area?
  • How much debt do you have?
  • Do you want to leave money to your children?

Now add to that random variables such as unexpected healthcare and emergency expenses, how long you will live, the inflation rate and the return you get on your investments and you can see how complicated the calculations can get.

According to experts, a good rule is to plan to have enough to provide 65% to 75% of your current annual income per year in order to provide the same standard of living. This income can come from a combination of many sources including Social Security, working part time, pension, individual retirement account (IRA), a savings account and investments such as bonds and dividend paying stocks.

Have 10x Your Salary Saved at Age 67

Fidelity’s savings factor outlines how many times your salary you should have saved by a given age based on when you want to retire and how you want to live in retirement. The following table is for someone who plans to retire at 67:

By Age:Below AverageAverageAbove Average

11 Times Your Final Salary

Aon Hewitt’s 2015 Retirement Income Adequacy at Large Companies study (an international consulting firm) says 11 times your final salary level (in addition to Social Security) is a good target to aim for to retire at 65 and maintain the same standard of living based on average life expectancy. It takes into consideration future medical costs and inflation.

When doing this calculation, don’t forget to factor in an average inflation rate of 3% or so for every year. To do this, multiply your yearly salary by 1.03 and take 65-75% of that number. For the year after that, you’ll have to multiply the original result of yearly salary times 1.03 by another 1.03 and take 65-75% of that number and add it to the total. There are a number of calculators available online to help you do this.

How to Get Your Retirement Savings above Average

0) Start Early
Start building your nest egg as soon as you have a steady income. Compound interest will have a huge impact over 4 decades on the money you invest in your teens and early 20s.

1) Reduce Expenses
The best way to start improving your retirement savings is simply to cut down on your expenses and save the difference. Depending on your situation, you may need make some sacrifices to find ways to cut your expenses. In some cases, you may simply need to reduce your amount of vacation time or the amount you spend on hobbies.

2) Don’t Touch What You’ve Already Saved
Never raid your retirement fund, as it can be difficult to make up lost savings. Of course, one cannot always predict what direction life will take, so it is good to have a separate emergency fund to take care of unexpected expenses.

3) Take Advantage of Available Plans
Check to see what types of plans your employer offers. Investments plans like 401K are great because they protect your dividends from taxes and they provide good interest rates. Some employers may even match your savings up to a specified percentage of your salary. Other good alternatives to a 401K are retirement accounts like IRAs or mutual funds.

4) Adjust Asset Allocation
Adjust the allocation of your assets. Young people should invest in opportunities that are higher risk, higher return, but everyone should adjust to lower risk, lower return vehicles as they get older.

5) Work Longer
Delay retirement for 1 or 2 years (or more). This can make a huge difference because the benefits are two-fold. First, it brings in a year or two worth of salary. Second, it reduces the number of years you will have to rely on your retirement savings. Working part time during retirement is another option that has the same (but relatively smaller) effect.

6) Increase Contributions as You Age.
As you get older, your financial responsibilities slowly disappear. The kids move out, you pay off your mortgage (finally), you only need one vehicle instead of two, etc. This is a great chance to increase the amount you put away using this extra money instead of using it on vacations, new cars, etc.

7) Downsize
Downsize your home/lifestyle. Unless your area was hit hard by the real estate decline, consider selling your home, using a portion to buy a smaller, less expensive house (in an area with lower taxes) and investing the remainder in your retirement.

Generally, you should be careful about how much money you put in stocks because you can never tell when the market will swing in a negative direction. However, a healthy investment portfolio should have at least a small portion in stocks and they are great way to diversify your finances. For reduced risk and recurring income, buy stocks that pay dividends on an annual or semi-annual basis.

Life after Retirement

If you plan well and are able to meet the cost of living after retirement, then you can focus on enjoying all that those years have to offer. Generally, it is up to the individual to have the right attitude in order to find the potential, sense of purpose and enjoyment in retired life.

Many people fail to make the adjustment because they have become too set in their ways. Some steps that they can take to adapt to the next stage of their lives include:

Finding new interests – Try new things to figure out what is that you want to do with your free time. If you are unable to follow your old pursuits, then find new ones that interest you. For example, think about taking up ballroom dancing, curling, bowling or swimming as these activities can help you and your spouse stay healthy while providing plenty of fun in the process.

Help others – One of the most satisfying ways to spend one’s retirement is giving back to the community. Think about helping the poor, the homeless, children, animals and the sick. There are so many ways you can use your time and effort to help those in need. You may feel more purpose in life than you ever did before by giving back.

Become a teacher, mentor or coach – Pass on your experience and knowledge to the younger generation.

Start a small business – Make some extra money and use up some mental and physical energy in the process. This could involve anything from selling products online, dog walking, babysitting, gardening, writing or painting.

If reading this as stressed you out, just sit back, take a deep breath and go back through this guide (taking notes this time) and bring up these points when you’re developing a plan with your spouse/family and a certified financial planner. No matter where you’re at with your savings or what your current financial position is, there is still time to turn things around. Talk to a financial advisor and they will work with you to create a realistic and attainable plan for getting your retirement savings back on track. Don’t put it off. Get started today.

Please note that the statistics and advice in this guide is for informational purposes only and should not take the place of professional financial advice.

What are your thoughts on the current state of retirement savings? How do you save for retirement and how much do you have saved?

18 thoughts to “Complete Average Retirement Savings by Age Guide”

  1. My wife is 57 and I am 54. Together, our combined retirement savings add up to a little over $600,000 which is split between Roth IRAs, 401k and 403b. We have consistently put away an average of 20% of our income for the past 20 years. If we retire at 62-65, our Social Security and pensions will provide approximately $48,000 annually. I used to think that our savings would be enough, but based on the situations I see others in, I’m not so sure. I feel that it might not be enough to cover medical costs, possible long-term care and the effects of inflation.

    I think I read somewhere that someone in my situation should have $1.5 million+ saved up. This is basically impossible in today’s market. I guess there are always the options of postponing retirement and downsizing. My question is how in the world are 60 year olds going to survive when they have a tenth of what we have saved up?

    1. Jacob – I am 50 but understand your concern. My financial planner opened my eyes not long ago when we were talking about retirement. He pointed out that I don’t play golf, I don’t drink, I don’t do many other cash consuming events and I don’t see myself ever sitting around the house tapping my foot.

      When he asked me “What does retirement mean to you?” it was an awakening. I had pictured the standard gold watch, sitting around reading the paper and waiting for my next meal at some buffet place. Then I realized… that was not what I wanted anyway. Retirement would be doing things that earn money that I really want to do. With that I started retooling two years ago on my weekends for some dream jobs (Coaching, mediation and possibly becoming a realtor). These are things I always wanted to do and it is part time enough that I have a purpose without the prison. It feels nice to do something proactive about the prospect of retirement rather than hold my breath. In my case – hope is not a strategy.

    2. Jacob, if you save $15,000 a year for the next 10 years, earning 6% a year, you will have $1.2 million. If you can, work to 65-67. There are some things to know about when you start Social Security, having one of you claim and then postpone taking it, or taking half of the older one’s social security, etc. I don’t know all of the tricks but you do sound like you will actually be in good shape if you make a few right choices. You might want to look for a financial advisor that charges hourly or flat rates.

      1. Mary, where did you come up with the interest rate of 6%?? Do not say stocks because stocks also go down and you lose. I do not believe that a person can consistently get a 6% rate safely these days. I personally know several people who have lost large sums by being invested in stocks.

        1. Dwight, the Vanguard Total Stock Market mutual fund is a very lost cost index fund (expense ratio .05%) that has returned 7.51% for the 10-year period between 2004-2014. This time frame spans the second worst financial crisis in our history.

          So if you just went with this one U.S. stock fund, you have a good chance of making the 6% average per year. NOTE that some years it is down by 20% or more, and some years up by 20% or more.

          To smooth that out you could add the Vanguard mutual funds which focus on U.S. Small Caps (which get historically highest returns), International Large and Small Caps, Emerging Markets and Global REIT (real estate trusts).

          If you are 50 or older or if you know you don’t weather big drops very well, add government bonds (skip corporate bonds, too volatile).

          Here is a solid portfolio for a 50 year-old or anyone more conservative, which will continue growing but has a bond component to steady the stock drops:


          VFINX Vanguard 500 Investor 16%
          VIVAX Vanguard Value Index 16%
          NAESX Vanguard Small Cap Index 8%
          VISX Vanguard Small Cap Value Index 8%
          REIT Vaguard Reit Index 8%
          VPACX Vanguard Pacific Stock Index 5%
          VEURX Vanguard Europoean Stock Index 11%
          VEIEX Vanguard Emerging Markets Stock Index 8%
          VBISX Vanguard Short-Term Bond Index 20%

          Here is the same portfolio using low cost ETF’s. The expense ratio of this portfolio is 0.25%, which is phenomenal:


          U.S. Large Cap 16% IVV
          U.S. Large Cap Value 16% IVE
          U.S. Small Cap 8% VB
          U.S. Small Cap Value 8% VBR
          Real Estate 8% VNQ/RWO
          Int’l Large 10% VEU
          Int’l Small Cap 6% VSS
          Emerging markets 4% VWO
          Emerg Mrkts Small 4% EWX
          TIPS (Inflation-protected Treasuries) 20% TIP

          TD Ameritrade offers all of the above ETFs on commission free trades (plus a lot more). So you can buy 1 or two shares at a time without paying any commissions. I have my 51 yr-old boyfriend set up in this portfolio for his IRA, it’s done well and the 20% bonds did the job of capping the drop in this recent Sept-Oct 2014 decline which was 8% across the S&P 500.

          If you are already retired or very close, looking for something “safe” to generate interest/paychecks for yourself, you can also look to dividend-paying stocks. Search for “Dividend Aristocrats” and pick 5 to 25 of these U.S. blue chip companies, that have been keeping people alive (and making many very wealthy) for 25 to 75 years.

          I continue to learn about all of this, much of my best info comes from and

          1. Also, Dwight, I almost forgot – you have to be in stocks. It’s just the way it is. Unless you have millions and can afford to not be invested at all, or in all bonds (which also go down).

            But which stocks, makes all the difference. The index funds are most diversified. Indvidual stocks like Johnson & Johnson are about as rock solid as you can get. These are the Dividend Aristocrats. They pay regular dividends. Their share price might go down at times, but they have been committed to continuing to pay dividends for decades.

            There are no safe investments. You have to take some risk to get some reward. Don’t buy IPOs or companies just because you like the product. Look for dividend-paying history and that should guide us well. REITs like HCP, HCN, O – these are set up specifically to continue paying dividends, that is their sole and legal purpose. They pay 5%+.

        2. Stocks go down and you lose? Obviously you’ve been out of the market these last 7 years, or so. Yeah, 2008 was painful, but the best place to grow your income is in equities. Read Bogleheads Guide to Investing. 6% is not an agressive position.

    3. It’s sad but true that you need atleast $1,000,000 to generate $50,000 annually until
      age 80. That’s if you retire at 62-68 yrs old. This is what most financial advisors are saying.

  2. Certainly the more yo can save, the better off you will be. But there are many factors that go into retirement comfort…a big part is “where”, where you retire makes a huge difference…between New Jersey (the highest tax state) and FL (a very low tax state)…then too, housing costs, etc. are a large variable…so don’t just think…retirement $’s…think retirement $’s where?..yes there are tradeoffs, some states might tax property more (though none more than New Jersey)…it’s just a thought…

    1. I’m glad you pointed out that where you live is a big factor. I’m always amazed that when they give projections of how much you need in savings, they never say that you have to look at how much income is coming in versus how much your expenses are. Living in New York with a very high tax rate, and planning to move to Florida with a very low tax rate, means that my income will more than meet my expenses. That translates to having less need for a huge retirement savings fund.

  3. Listen to all of you. Know wonder everyone is confused. The fact is there are so many variables everything could change. Many people today live quite well on $30,000 a year while others would be poor on that. It’s how you live and want out of life.

    1. This it true also … If you have more coming in than going out, you’re ok.
      Facts are that we spend more than we make, and continue to have the
      same expenses in retirement as when working. Even if your home is
      paid off, you still have 1/3 left over in taxes, insurance, and upkeep/ maintenance.
      Upkeep could cost even more than normal if you live in the same old home.
      Don’t forget the transportation and it’s cost. Just saying ….

  4. I am an investment dummy and just figured we should save in 401ks and hope for the best (I.E. just have money in mutual funds). My wife is 50 and I am 47. We both max out 401k @ $18k/YR and she just started this year adding the “catch-up” $6k. So; we put $42k/YR away for retirement on a HH income of $250k and have ~$0.5MM currently saved. I think that is about enough (just retirement savings) if we keep this pace until age 65 to cover living expenses. But my question is: what about a vehicle to account for the years where one of us may still be working (aka: All things equal I may work 3 years farther in the future than she does) and does that throw a tax problem in the mix? Should we be trying to supplement a Roth or Bank CDs or something to have available hard cash to span this 3 YR gap? Assuming Uncle Sam will punish us for household income while taking retirement income from savings? As a novice I figure if this is needed we better start now as time seems like the only real advantage in all this.

    Thanks – Matt

    1. Matt – you make too much HH to qualify for a Roth IRA. You should save some money in a taxable brokerage account to cover what you mentioned – the gap years. Tax efficient stock investments would be Vanguard Total Stock Market Index Fund as well as their Total International Stock Market Index Fund. Also invest in their Municipal Bond Fund (or ETF) in a taxable account. That could be your core “Trio” in taxable, and then mix in a CD ladder. After that, consider individual stocks that are tax efficient such as the smaller Berkshire Hathaway B shares.

    1. what are the people in the U.S. with less than $50,000 in retirement savings going to do? why, look to high-wage earners to pay ever-higher taxes to fund entitlement programs outside of Social Security and Medicare – it’s happening now… the only way to save some for yourself is to stash as much in a ROTH, real estate, and commodities or other investments (even ROTHs aren’t going to be safe in the future – what the government giveth, the government can taketh away)

      i live in a retirement (55+) community that consists of attached villas and single-family homes – using the county’s appraiser web site, i found out that *half* of the residents – many in their 70s or older – had a mortgage! and these were the people that constantly complained that maintenance costs for common areas were too high, that they only lived on Social Security, that they couldn’t afford an extra $10 a month to cover increased expenses – the result? a steady deterioration in their quality of living and their insistence that everyone else be dragged down to their level

      the sheer idiocy boggles the mind – so if you’re a hard-working person in your 50s, get ready to have your fellow citizens and government come after your savings – get ready!

Leave a Reply to Gene Martinez Cancel reply

Your email address will not be published.