If you were asking yourself “how much do I need to retire,” or “what financial traps should I look out for?” Then you’ve come to the right place!The following retirement savings statistics provide an extensive overview of the average, decent, and bad retirement practices.
The answer to the burning question — how much to save up for your golden years to lead a decent life (both in sickness and in health) — is right here too.
Are you really on-track with your retirement savings, and if not, what should you do? Invest heavily in your health, or pray for better times? Risk it, or frugally save each and every penny?
Find out all the answers and more in the stats below!
Top 10 Core Facts & Retirement Savings Statistics for 2021
- 44% of non-retirees think that their retirement plan is off-course.
- $1 million in savings may not be enough to retire.
- The average social security payments to retirees are only $15,619 per year.
- 40% of middle-class workers may face poverty if they retire at 62 years of age.
- In Q4 of 2020, the average 401(k) balance amounted to $121,500.
- Statistics on retirement savings by age report 13% of Americans older than 60 don’t have any retirement savings.
- 33% of Millennial employees have withdrawn money from their retirement plans due to the economic crisis.
- The median income of households aged 45–49 is $93,393.
- American households aged 65–69 have a mean income of $88,291 per year.
- Americans aged 55–59 have the highest average value of retirement savings — $223,000.
Latest US Retirement Savings Statistics
Just how many Americans have retirement plans, and what are their retirement incomes?
Let’s find out!
1. 44% of non-retirees think that their retirement plan is off-course.
(Federal Reserve) (Statista)
On the other hand, just 36% of US adults in the workforce believe that their retirement savings are adequate. The remaining 20% of respondents said that they were uncertain about it.
Furthermore, according to a different survey, only 20% of workers were “very confident” that they would have enough money for retirement.
Conversely, 44% were “very or somewhat confident,” and around 36% believed they were completely off-track.
2. The average retirement age in 2020 was around 64.
Historically, the average retirement age grew from 62 (for men), i.e., 57 (for women) in 1986, to 65 (for men) and 63 (for women) in 2016. Today, the average retirement age is 64, although it varies by state.
For example, people who live in Washington, DC, retire at age 67. Residents of Iowa, Texas, Kansas, and Maryland decide to retire at 65, whereas citizens of Alaska retire at 61.
3. Based on one recent retirement statistic, only 1 in 5 US workers plans to fully retire by 65.
A survey of 5,923 workers in medium for-profit companies revealed that 43% of them were thinking of surpassing the average retirement age with a phased-out transition into retirement.
In other words, by gradually reducing working hours (27%) or working in a different capacity (one that is less demanding and more satisfying) for 16% of respondents.
To survive financially, 22% plan to continue their working life in full capacity for as long as possible.
4. Retirement savings statistics from 2019 reveal 14% of non-retirees rely on real estate to boost their retirement savings.
In 2019, the majority of non-retirees with saving plans for retirement (54%) had a defined contribution retirement plan such as the 401(k) or a 403(b) plan.
Non-retirement saving accounts took second place and were used by 42% of non-retirees in 2019.
An IRA was reportedly used by 33% of respondents, and 22% used a defined benefit pension. Another 7% relied on a business for their retirement savings, and 14% on their real estate.
As much as 26% of respondents reported having no retirement savings whatsoever.
5. The recommended retirement savings by age vary greatly — between 10% and 27% (depending on age).
The Retirement Research Center at Boston College calculated just how much a person has to save for retirement. For medium-wage workers that want to receive at least 70% of their final salary when they retire at the ripe old age of 65, the following applies:
- 10% of their salary for retirement funds at the age of 25.
- 15% of their salary for retirement funds at the age of 35.
- 27% of their salary for retirement funds at the age of 45.
6. $1 million in savings may not be enough to retire, the average retirement savings by state stats indicate.
(CNBC) (The Motley Fool)
The answer to the question “how much money do you need to retire” is no longer $1 million, according to a recent report by GOBankingRates.
New calculations reveal that $1 million may be enough to get by for only 12 years, depending on where you live.
For instance, Mississippi was the most affordable state for retirees at $618,000.
Based on the general costs of living and how much it costs to retire, Tennessee came in second place ($661,000), followed by Alabama ($713,000), Oklahoma ($724,000), and Arkansas ($728,000).
7. The average social security payments to retirees are only $15,619 per year; retirement savings statistics point out.
(Pension Rights Center)
This represents roughly two-fifths of their earnings before retirement (or 40%).
In comparison, Americans with pensions receive around $36,270 per year, which is (at the very least) twice as much as the retirement income of those living only on social security.
8. In 2019, 4.9 million Americans over 65 lived in poverty.
The poverty rate was higher among people over 80 — 11.1%, especially when it comes to women (13.6%).
In addition, the poverty rate for Americans between 75 and 79 was 9.2%. In comparison, 7.4% of people aged 70–74 and 8.4% of people between 65 and 69 lived in poverty.
9. The average retirement income per household in 2021 is $56,632 for median income and $84,153 for mean income.
Based on the National Retirement Risk Index data, 50% of retirees over 65 won’t have enough money to obtain the same lifestyle they had before retiring.
Although these estimates are based on the 2019 data compiled in 2020, and the economic changes are not represented in it, the numbers are pretty close to the accurate picture.
10. 40% of middle-class workers may face poverty if they retire at 62 years of age, stats on average retirement savings by age reveal.
Projections following the stock market statistics show that around 8.5 million of those who will retire at the age of 62 will fall below the federal poverty line. Meaning, most of them will receive only $23,340 individually or $31,260 as a couple.
Economists say that this is primarily due to depressed earnings, lower asset values, and increased healthcare costs.
This is precisely why most Americans plan on working beyond their best age to retire, which (historically speaking) for the year 2021 is 64.67 years.
11. By the end of 2019, the average retirement savings of 401(k) plans reached $112,300.
The average 401(k) balance of US citizens increased by $7,100 since September of 2019, reaching $112,300 by the end of the year.
The reason being, employees started saving more. In fact, one-third of workers increased their savings by an average of 3%, whereas 35% of employers enlisted their new employees in their 401(k) plan.
The break-out data for the average 401k balance by age shows that those aged between 20 and 29 had savings of $13,200. On the other hand, those aged 50 to 59 had an average of $188,000 in their 401(k) balances.
Americans aged 40–49 had a solid $111,100 in their 401(k) plans, and seniors aged 60–69 had an average 401(k) balance of $212,600.
12. In Q4 of 2020, the average 401(k) balance amounted to $121,500.
The 2020 data on the average 401k balance by age suggests there was an increase in savings, compared to 2019:
- Ages 20–29: $15,000 in savings
- Ages 30–39: 50,800 in savings
- Ages 40–49: $120,800 in savings
- Ages 50–59: $203,600 in savings
- Ages 60–69: $229,100 in savings
- Age 70+: $213,600 in savings
It’s worth noting that due to the pandemic, about 1.6 million Americans pulled their 401(k) savings (between March 2020 and January 2021).
Average Retirement Savings by Age 2021 Update
Which generation has the highest retirement savings?
Take a look below and find out!
13. 13% of Americans older than 60 don’t have any retirement savings.
(Federal Reserve) (Statista) (CNN)
The latest Federal Reserve survey, conducted between 2018 and 2019, shows an alarming number of Americans (above the age of 60) with no retirement savings or pension plans whatsoever.
Retirement savings statistics show that in 2018, around 32% of the non-retired population below 25 started putting money aside for retirement.
66% of millennials between the ages of 21 and 32 reported having near to nothing on their retirement savings accounts.
Nevertheless, 17% of those aged 45–59 and 13% of those over 60 reported having practically zero savings for retirement.
14. The average retirement savings for Baby Boomers is $920,400.
Based on a recent survey, 82% of Boomers believe their retirement savings will be enough to support their lifestyle. Likewise, most Boomers believe that $135,100 per year is enough to have a great retirement life.
On top of that, 65% of Baby Boomers would rather spend their retirement money on themselves than leaving it to their children as an inheritance.
15. When it comes to above-average retirement savings by age, workers aged 25–34 had the lowest contribution among all age groups — merely 10.2%.
Just 1 in 10 young workers contribute the recommended 15% (or more) of income to their retirement savings, according to the latest credit card statistics.
What’s more, the percentage of those contributing this amount increases with age. Namely, 12.3% and 15.8% for those aged 35–44 and 45–54, respectively.
Naturally, the 55–64 age group has the highest participation rate with 18.3%. They also find the options for reverse mortgage quite appealing too.
16. Retirement savings statistics show about 33% of Millennial employees have withdrawn money from their retirement plans.
The main culprit — the Corona-induced economic crisis.
Namely, Millennials are more likely to withdraw their savings due to economic problems than other generations; albeit they have the lowest median retirement savings ($23,000) compared to Gen Xers ($64,000) and Baby Boomers ($144,000).
In comparison, 15% of Gen Xers and 10% of Baby Boomers took the money from their retirement plans or planned to do so.
17. Based on the data on the average retirement savings by age in 2019, individuals between 18 and 24 had about $4,745.25 in savings.
The retirement savings were higher for older people.
- For individuals aged 25–29 the average was $9,408.51 in savings
- For individuals aged 30–34 it amounted to $21,731.92
- For individuals aged 35–39 it amounted to $48,710.27
- For individuals aged 40–44 it amounted to $101,899.22
- For individuals aged 45–49 it amounted to $148,950.14
- For individuals aged 50–54 it amounted to $146,068.38
- For individuals aged 60–64 it amounted to $221,451.67
- For individuals aged 65–69 it amounted to $206,819.35
18. The average retirement savings in 2018 confirm that only 27% of those aged between 45 to 59 had $250,000 in their retirement funds.
The average amount of savings that Americans deem sufficient for staying on track varies among the different age groups, according to the 2018 Federal Reserve survey.
For example, for respondents in the 18–29 age group, this amount was $10,000. Yet their personal finance statistics show that only 22% have attained this goal.
Another 22% of those aged 30–34 had $100,000 or more in their retirement savings, which is considered their threshold for good retirement savings plans.
19. Statistics on the average retirement income by age point out that the median income of households aged 45–49 is $93,393.
As per the US Census Bureau, the median income of households aged 50–54 is estimated at $91,214 per year.
The median income for households aged 65–69 is $60,324 per year. For those aged 70–74, it amounts to $53,327 per year. And $37,335 per year for Americans that are 75 or older.
As we can see, the numbers get smaller with age — hence why so many are delaying their retirement to cope with rising healthcare costs.
20. Based on the average retirement savings by income, American households aged 65–69 have a mean income of $88,291 per year.
The average mean income for households with early retirees aged 55–59 is $118,061, and for those aged 60–64 it’s $100,842.
Households aged 70–74 have a mean yearly retirement income of $79,344 and a median income of just $53,327. Those that are 75 years and older have a mean annual income of $58,644 and a $37,335 median income.
21. Retirement savings by age chart shows Americans aged 55–59 have the highest average value of retirement savings — $223,000.
Next in line are 60–64-year-olds with an average retirement savings of $221,451, followed by 65–69-years old ($206,819) and 70–74-years old ($203,964).
Individuals over 80 have an average retirement savings of $128,216, whereas the youngest individuals (those between 18–24 years of age) have merely $4,745 in savings.
22. Retirement savings statistics suggest Medicare doesn’t cover assisted living.
Assisting living facilities can cost you an average of $4,300 per month, whereas private rooms in nursing home facilities cost an average of $8,821.
That said, Medicare will cover only 100 days of care in the nursing facility. So it might be a good idea to start preparing your long-term care insurance in your 50s or 60s, given that almost 70% of people older than 65 need long-term care.
What is the average retirement savings in 2019?
According to the Fidelity Investments database, which comprises some 30 million retirement accounts, in 2019, the average retirement 401(k) balance was $112,300 as of September 2019.
The average IRA had $115,400 on its balance, and the average tax-exempted 403(b) had $93,100.
That said, while the average 401(k), IRA, and 403(b) balances reached a record-high in 2019, in the fourth quarter of 2020, the average 401(k) balance struck a record-breaking $121,500.
How much money does the average 55-year-old have saved for retirement?
As per calculations from T. Rowe Price, 55-year-old singles should have saved 6½ to 8 times the yearly earnings they have at the present date to stay on track with their retirement plans.
Married individuals with dual-income would have to save 5½ to 7 times, whereas married, sole earners need to save 4½ to 7½ times.
These estimations are based on the assumption that the individual has a current household income between $75,000 and $250,000 and that they retire at 65 but start earning and saving at the age of 25.
How much should you have saved for retirement by age 50?
Individuals who are 50 years of age, with a salary of $50,000 or more, should have saved about $350,000.
If, by any chance, this is not the case, there are a few things you can do. For example, talk to your financial advisor or start adding some extra money to your IRA (about $1,000) and 401(k) or 403(b) plan (about $6,500).
How much should I have saved for retirement by age 60?
By the time you’re 60, you should have saved about $390,000. In addition, 60-year olds can also take advantage of the Social Security benefits, which can make a huge difference.
However, if you decide to pay for social security, make sure you claim it when you’re 70 to get the full benefits.
How much does the average person have in savings when they retire?
This will depend on your salary. Experts believe that the ideal retirement income should amount to 80% of your pre-retirement salary. Simply put, if you make $100,000 per year, you’ll need to have an income of about $80,000 to maintain the same lifestyle.
To get the desired retirement income, you can use the 4% rule. Divide your annual retirement income by 4% to determine how much money you need to withdraw from your retirement account each year.
How much money do you need to retire with a $100,000 a year income?
The answer will depend on your retiring age and investment plans. For example, if you retire at 25, you would need to invest $6 million in a taxable account. If you plan to retire at 35 and live off of $100,000 per year, you would have to invest $5.2 million.
Next, at 45, you would need to invest $4.3 million in stocks (80%) and bonds (20%), whereas at 55, you’d need $3.5 million in a taxable investment account.
Lastly, on the day they retire, 65-year-olds would have to invest $2.5 million.
How much money does the average 57- year-old have saved for retirement?
Based on the Federal Reserve SCF data, 55–59-year olds have the highest retirement savings on average among other age groups — $223,493.56.
In contrast, 65–69-year-olds have savings of $206,819.35, followed by 60–64-year-olds ($221,451.67), and 50–54 year-olds ($146,068.38).
People aged 18–24 have the smallest average savings ($4,745.25), followed by 25–29-year-olds ($9,408.51), and 30–34-year-olds ($21,731.92).
How much does the average 70 year old have in savings?
By the time you’re 70, you should have an income of about 20 times more of your annual expenses in savings. Simply put, if your annual spending amounts to around $75,000, you should have approximately $1,500,000 in savings.
With a stock market financially plagued by the COVID-19 outbreak, many are dubious of whether their retirement balances will outlive this crisis and allow them a serene retirement.
The latest retirement savings statistics show record balances in US accounts. And, hopefully, these will be enough to beat the odds (and the coming economic crisis) and help older Americans retire sooner, or in the case of millennials, more probably, later.