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How does your savings stack up? Here’s what it takes to be in the top 10% of retirement savers
Let’s talk about your nest egg. No, not in a “Why didn’t you save more?” » way – it’s not a guilt trip. Instead, think of it as a user-friendly check-in. Whether your savings are booming or just taking off, it’s natural to ask yourself: How do I measure up? And for those of you watching the top 10% of retirement saversthese numbers will show you exactly what you need.
Spoiler: not everything is doom and gloom; there is always time to act. Let’s break it down.
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Averages: are you ahead or behind?
First, let’s look at what the average American has saved for retirement, by age group. According to the 2022 Survey of Consumer Finances, here’s where things stand:
Under 35 years old:
• Average savings: $49,130
• Median savings: $18,880
35-44 years old:
• Average savings: $141,520
• Median savings: $45,000
45-54 years old:
• Average savings: $313,220
• Median savings: $115,000
55-64 years old:
• Average savings: $537,560
• Median savings: $185,000
65-74 years old:
• Average savings: $609,230
• Median savings: $200,000
75 years and over:
• Average savings: $462,410
• Median savings: $130,000
If you beat those averages, it’s worth celebrating! But maybe you’re considering taking it to the next level: joining the top 10%. What does it look like?
The richest 10% of pension savers are in a league of their own. Here’s what it takes to join their ranks:
Median savings: around $900,000.
Average savings: approximately $1.3 million.
It’s important to mention that the average is higher because a few ultra-wealthy savers skew the numbers, while the median shows what most people own.
At age 50, the richest 10% of savers often have more than $500,000 saved.
By age 55, they’re typically closer to $750,000 or more.
And the cream of the crop? THE the richest 1% have savings of $2.3 million. But when you consider a broader definition of retirement assets, that figure jumps to $5 million, according to DQYDJ data, using Federal Reserve statistics.
What should you aim for?
Even though the top 10% seems far away, financial experts offer guideposts to keep you on track toward a comfortable retirement:
• Age 30: Save 1x your annual salary.
• 40 years old: 3x your salary.
• 50 years old: 6x your salary.
• 60 years old: 8x your salary.
• 67 years old: 10x your salary.
These steps are not hard and fast rules: life happens. But they are a good starting point to see where you stand.
If your savings are looking a little disappointing, don’t worry. There are many ways to catch up:
1. Maximize retirement contributions: Contribute as much as possible to your 401(k) or IRA. And if your employer offers a match, collect that free money!
2. Start saving early: The earlier you start, the more compound interest works in your favor. If you are late, don’t worry, you can always catch up.
3. Take advantage of catch-up contributions: For people over 50, you can save an additional $7,500 per year in your 401(k). Starting in 2025, people aged 60 to 63 will be able to save up to $11,250.
4. Cut down on unnecessary spending: Redirect what you save into your retirement fund. Small sacrifices now can lead to big wins later.
5. Diversify your investments. A combination of stocks, bonds and other assets can balance risk and grow your nest egg.
It’s not too late to act
If you’re late, don’t panic: it’s never too late to start. Whether you’re catching up in your 50s or just getting started in your 20s, every little bit helps. The key is consistency and making smart financial decisions now to give your future a head start.
So, how does your nest egg stack up? If you’re already ahead of the averages, you’re in a great position. And if not, now is the perfect time to build a plan and take control of your financial future. Remember, saving for retirement isn’t about perfection, it’s about progress.
*This information does not constitute financial advice and personalized advice from a financial advisor is recommended to make informed decisions.
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