Retirement Savings by Age
Comparing the average retirement savings across different age groups is a helpful indicator of whether or not you’re saving enough.
According to a Federal Reserve survey of 11,667 respondents, only 31% of the population feels on track with retirement savings, leaving many underprepared.
Given that 27% of adults surveyed consider themselves retired (even though some were still working in some capacity), understanding how much to save for your later years is essential. [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
This guide provides a comprehensive overview of average retirement savings across ages and other factors crucial for planning a comfortable retirement.
Key statistics
- People with a Defined Contribution Plan at Vanguard have saved an average of $112,572 for retirement so far, and 31% of the U.S. population feel on track with their retirement savings.
- 27% of adults surveyed in the United States consider themselves retired, with 4% of them being under the age of 60 years.
- People aged 25-34 have saved an average of $30,017 for retirement, while people aged 35-44 have an average of $76,354 saved for retirement, according to Vanguard’s Defined Contribution Plan participants.
- According to Fidelity, the recommended retirement savings for people aged 30 are $56,160, and for people aged 40 are $203,268, showing that both of these age groups are below the recommended target.
- Those aged 65 years and above with retirement savings plans have an average of $232,710 in retirement savings, which is $361,500 below Fidelity’s recommended amount.
- 47% of people with disabilities have retirement savings compared to 76% of people without disabilities.
How much do Americans have saved for retirement?
Vanguard carried out a study of average savings accounts for their customers in different age groups. The data shows average retirement savings amounts of $112,572.
This varies significantly by age, with those in their late 20s to early 30s saving an average of over $30,000 to date compared to those in their mid-30s to early 40s who save over $70,000 so far. Of course, the younger groups have had less time to accrue funds and still have 20, 30, or 40 more years to continue adding to their savings pot.
People aged 65 years and above typically have an average of $232,710, benefitting from a longer period to accumulate wealth. [2] Vanguard's 'How America Saves Report 2023' https://institutional.vanguard.com/content/dam/inst/iig-transformation/has/2023/pdf/has-insights/how-america-saves-report-2023.pdf
Average 401(k) balance by age
A 401(k) is an effective way to save a retirement fund; your employer may contribute by matching what you save or contributing a percentage.
If you’re wondering how much most people save via a 401(k), check out the average 401(k) balance and median 401k balance by age below:
| Age |
Average 401(k) |
Median 401(k) |
| 20s |
$74,460 |
$29,753 |
| 30s |
$160,517 |
$69,718 |
| 40s |
$344,182 |
$151,274 |
| 50s |
$558,740 |
$247,338 |
| 60s |
$555,621 |
$209,382 |
| 70s |
$417,379 |
$103,219 |
| 80s |
$385,783 |
$78,534 |
Source [3] Empower - Average 401(k) Balance by Age https://www.empower.com/the-currency/life/average-401k-balance-age
Although the above works as an excellent guide, there are other things to consider, including pay discrepancy and skewed figures by those who pay bigger sums than most into their 401.
Matching the averages stated does not guarantee that you will be on track with your payments.
Working your way to financial freedom may require more than the average savings in a 401(k).
Do Americans feel prepared for retirement?
Most U.S. adults have begun saving for retirement, but an overwhelming portion still don’t feel they’re on track.
Research shows that progress towards retirement saving goals declined between 2021 and 2022, with a drop of 9 percentage points (from 40% to 31%) in non-retirees who feel satisfied with their savings. [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
The study shows that different factors play into the preparedness of each person. The older an individual, the more likely they will feel on track with retirement savings.
It makes sense that the older population feels more comfortable with the amount they’ve saved, as they’ve had longer to contemplate the amount to put away and have also had a longer duration to save up.
How prepared people feel for retirement by age
This study compares how many people have savings and how many feel on target, distinguishing by age group. The data shows that the older people get, the more prepared they feel for retirement which makes sense considering older people typically have accumulated more savings for retirement than younger people.
However, only 41% of those aged 60 and over say they feel like their retirement savings are on track, while just 24% of people aged 18-29 feel on track with their savings.
| Age |
Feel their retirement savings are on track |
| 18-29 |
24% |
| 30-44 |
32% |
| 45-59 |
43% |
| 60+ |
41% |
Source [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
In addition to age, other factors can affect what’s saved, such as disabilities, race and salary.
How prepared people feel for retirement by race
Here’s a comparison of demographics including White, Black, Hispanic and Asian - showing the contrast between each group.
In the United States, 38% of the Asian community feels confident about their retirement plan, followed by white people at 37%, Black people at 22%, and Hispanics come in last with just 20% saying they feel financially prepared for retirement.
| Race/ethnicity |
Feel their retirement savings are on track |
| Asian |
38% |
| White |
37% |
| Black |
22% |
| Hispanic |
20% |
Source [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
How many people have retirement savings?
72% of the respondents to the Federal Reserve’s Economic Wellbeing Survey have retirement savings, but not all feel they have saved enough with only 31% saying they think their retirement savings are on track.
The study below shows the difference between the population with savings and those that feel on track for their retirement pot.
|
Have any retirement savings |
Feel their retirement savings are on track |
| U.S. Population |
72% |
31% |
Source [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
Again, plenty of elements can affect how much a person saves. Studies show a gap between different amounts of savings by age, generation, race and whether a person has a disability or not.
Americans who have retirement savings by age
Fidelity’s guidelines suggest having 1x your annual salary by 30, increasing it to 10x by 67.
The amount saved for your retirement varies depending on your age; the older you are, the more you should be able to save. [4] Fidelity's Retirement Savings Guidelines https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire
According to Fidelity’s survey, only 24% of 18-29-year-olds feel on track with their retirement savings, compared to 57% of all 18-29-year-olds who have retirement savings.
| Age |
Have any retirement savings |
| 18-29 |
57% |
| 30-44 |
72% |
| 45-59 |
81% |
| 60+ |
88% |
Americans who have retirement savings by ethnicity
Studies highlight a notable disparity in retirement savings among different ethnic groups in the U.S.
White Americans typically have higher retirement savings than ethnic minorities. The data shows that over half of Black and Latino households do not have any retirement savings, whereas this is the case for only about one-third of White households.
This discrepancy can be attributed to several factors, with one of these being the racial pay gap. This leads to lower lifetime earnings for Black and Latino workers, which in turn affects their capacity to save for retirement. [5] Investopedia's Article on Retirement Savings by Race https://www.investopedia.com/retirement-savings-by-race-5086962
Contrary to other patterns, the Federal Reserve survey found that one minority group in the U.S. has the largest population with retirement savings. Asian minorities lead in the percentage of individuals with retirement funds.
With 84% of people having savings, the Asian community has 4% more than the white demographic.
Blacks and Hispanics have a much smaller population currently saving for their retirement plan.
| Race/ethnicity |
Have any retirement savings |
| White |
80% |
| Black |
60% |
| Hispanic |
56% |
| Asian |
84% |
Source [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
By disability status
The study collected data on those with a disability and those without disability, collecting information on percentages with savings.
76% of individuals without disabilities have retirement savings, compared to 47% with disabilities.
| Disability status |
Have any retirement savings |
| No disability |
76% |
| Disability |
47% |
Source [1] Federal Reserve's 2022 Report on Economic Well-Being https://www.federalreserve.gov/publications/files/2022-report-economic-well-being-us-households-202305.pdf
How much should you have saved for retirement?
Fidelity recommends that by age 67, aim to save 10 times your annual salary. For example, with an average salary of $59,384, the target is $593,840. [4] Fidelity's Retirement Savings Guidelines https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire [6] BLS - Usual Weekly Earnings of Wage and Salary Workers https://www.bls.gov/news.release/pdf/wkyeng.pdf
Recommended retirement savings by age
By the time you’re 30, you should have saved the equivalent of one year’s salary. You can build on this by saving an additional year’s salary every five years until you’re 60.
For example, 2x your annual salary by 35 and 3x your salary by 40. You are then recommended to save a little more for your final non-retirement years.
According to this theory, you’d need to begin saving for retirement at age 25 to accrue the recommended retirement funds.
Using the recommended savings by age, you can determine if you’re on course to save what’s recommended for a leisurely retirement.
| Age |
Recommended retirement savings |
Recommended savings based on average salary by age |
| Age 30 |
1x annual salary |
$56,160 |
| Age 35 |
2x annual salary |
$135,512 |
| Age 40 |
3x annual salary |
$203,268 |
| Age 45 |
4x annual salary |
$265,200 |
| Age 50 |
6x annual salary |
$397,800 |
| Age 55 |
7x annual salary |
$452,816 |
| Age 60 |
8x annual salary |
$517,504 |
| Age 67 |
10x annual salary |
$548,600 |
Sources [4] Fidelity's Retirement Savings Guidelines https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire [6] BLS - Usual Weekly Earnings of Wage and Salary Workers https://www.bls.gov/news.release/pdf/wkyeng.pdf
How much have non-retirees saved for retirement so far?
Let’s look at how realistic these targets are when delving into what non-retiree U.S. citizens have saved thus far.
According to Vanguard’s study of Defined Contribution Plan participants, those aged 65 and over have an average of $232,710 saved, which is $361,500 below the recommended amount. Whereas those under 25 have $5,236 saved so far, it’s important to remember that the younger age groups have had less time to accumulate savings.
| Age Range |
Mean Average Retirement Savings |
| Under age 25 |
$5,236 |
| Ages 25-34 |
$30,017 |
| Ages 35-44 |
$76,354 |
| Ages 45-54 |
$142,069 |
| Ages 55-64 |
$207,874 |
| Ages 65+ |
$232,710 |
| Recommended savings |
$594,280 |
Source [2] Vanguard's 'How America Saves Report 2023' https://institutional.vanguard.com/content/dam/inst/iig-transformation/has/2023/pdf/has-insights/how-america-saves-report-2023.pdf
There is a wide divergence between the mean and median retirement savings by age. This is due to a small number of very large accounts that skew the mean average and significantly raise this above the median figure.
When considering the median values, it becomes evident that there is a significant gap in achieving the recommended savings targets across all age groups. The data below shows the median retirement savings by age group for Vanguard’s Defined Contribution Plan participants.
| Age Range |
Median Retirement Savings |
| Under age 25 |
$1,948 |
| Ages 25-34 |
$11,357 |
| Ages 35-44 |
$28,318 |
| Ages 45-54 |
$48,301 |
| Ages 55-64 |
$71,168 |
| Ages 65+ |
$70,620 |
| Recommended savings |
$594,280 |
Source [2] Vanguard's 'How America Saves Report 2023' https://institutional.vanguard.com/content/dam/inst/iig-transformation/has/2023/pdf/has-insights/how-america-saves-report-2023.pdf
Baby boomers, who began saving later in life, face a big retirement savings shortfall. Fidelity recommends having 8x annual income saved by age 60. The recommended savings amount for boomers earning the median annual income is $286,400. However, the median amount saved by boomers is only $112,000, which is only 39% of the recommended amount.
The average retirement age in the U.S.
According to Gallup’s annual survey, the average retirement age in the United States is now 61, reflecting a gradual increase over the past decade as more individuals plan for retirement at 65 or later. [7] Gallup Poll on Retirement Age https://news.gallup.com/poll/394943/retiring-planning-retire-later.aspx
In the United States, the trend of retirement age has seen a steady upward shift. According to the Employee Benefit Research Institute's 2023 Retirement Confidence Survey, a minority of workers (11%) plan to retire before 60. [8] EBRI's 2023 Retirement Confidence Survey https://www.ebri.org/docs/default-source/rcs/2023-rcs/rcs_23-fs-2.pdf?sfvrsn=708d392f_4
The majority, however, are looking at a later retirement, with 20% planning to retire between 60 and 64 and 23% at 65. Remarkably, 33% of workers anticipate retiring at 70 or older or not retiring at all.
The trend toward later retirement is reinforced by recent analyses, which point out the financial and health benefits of postponing retirement. Waiting longer to retire is often associated with more robust financial security and the potential for improved health outcomes. As life expectancies increase and retirement evolves, the concept of an 'ideal' retirement age is becoming increasingly flexible and tailored to individual circumstances.
Several factors are driving this shift towards later retirement. These include extended life spans, evolving pension structures, and a growing desire to actively participate in meaningful work. Consequently, many individuals are rethinking the traditional definition of retirement, balancing financial readiness and their personal and health needs.
The meaning of retirement has changed somewhat in recent years, with plenty of retirees planning paid work during retirement. Retirement can vary for many. [9] Forbes - What's the Best Age to Retire? https://www.forbes.com/sites/stevevernon/2023/11/17/whats-the-best-age-when-to-retire/
Factors that affect when you’ll be able to retire
Utilizing average retirement savings and recommendations can be a great guide, but it’s not always straightforward. Many factors can affect your retirement plans, including your desired lifestyle, whether you will continue earning and your commitments.
- The age you want to retire: Your target retirement age sets the timeline for your savings plan. Early retirement requires accelerated savings and investment strategies, whereas a later retirement age allows more time to build your nest egg. Deciding when you want to retire is the first step in creating a retirement plan that aligns with your long-term financial goals.
- The kind of lifestyle you want to have: Your desired lifestyle in retirement impacts how much you need to save. A more luxurious retirement lifestyle, with extensive travel and leisure activities, will require a larger savings fund compared to a modest, simpler lifestyle. Understanding your lifestyle aspirations helps in estimating the required retirement corpus.
- Working part-time in retirement: Considering part-time work post-retirement can supplement your income and reduce the amount you need to save beforehand. This option provides financial benefits and offers social engagement and a sense of purpose, positively impacting your overall well-being in retirement.
- Mortgage and financial commitments: Outstanding debts, including a mortgage, can impact your retirement timeline. High debt levels might require you to extend your working years to maintain a stable financial position. Planning to clear huge debts before retirement can ease financial pressure in your later years.
- Savings in retirement plans/pensions/401(k): The amount accumulated in your retirement plans, pensions, or 401(k)s is crucial in determining when you can comfortably retire. These savings form the backbone of your retirement funds, and their growth is influenced by factors such as contribution rates, investment choices, and market performance.
- Other savings: Apart from formal retirement plans, additional savings in liquid assets, real estate, or investments contribute to your retirement fund. Diversifying your savings can provide financial security and flexibility, reducing reliance on any single source of retirement income.
- Other earnings: Additional sources of income, such as rental properties, dividends, or a side business, can play a significant role in your retirement strategy. These earnings can provide a steady cash flow, allowing for a more comfortable retirement and possibly an earlier retirement date if these income streams are substantial.
Frequently asked questions about retirement
Why is the U.S. retirement age so high?
The normal retirement age in the U.S. is typically considered 67 for those born in 1960 or later.
The concept of "normal retirement age" in the United States has evolved, especially regarding Social Security benefits.
Additionally, shifts in the economy and the structure of retirement benefits, particularly Social Security, have influenced this increase. The gradual rise in the full retirement age (FRA) aims to maintain the financial viability of the Social Security system, acknowledging that people are living and working longer than in previous generations. This higher retirement age reflects a balance between the economic need for a longer working life and the demographic reality of extended lifespans. [10] Social Security Administration - Normal Retirement Age https://www.ssa.gov/oact/progdata/nra.html
What is the ideal retirement age?
The optimum retirement age in the U.S. is subjective and depends on the retirement plan in place.
If you have lots planned for retirement and require more money, you’ll need longer to save. The 2023 Retirement Confidence Survey reports that 62 is the median age that people retire, however one-third of current workers plan to retire at 70 or older, but this doesn’t reflect the ideal age, with many of those savings being unable to retire when they’d prefer. [8] EBRI's 2023 Retirement Confidence Survey https://www.ebri.org/docs/default-source/rcs/2023-rcs/rcs_23-fs-2.pdf?sfvrsn=708d392f_4
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