What Is The Average Savings By Age?

Almost as soon as we can understand the concept of money and what it can do for us, we’re also told that it’s important to save toward your goals. While your savings goals are going to vary by your financial situation and your long-term plans, you may wish to see how you stack up compared to peers. Rocket Money^SM looked at the average savings by age according to the latest data from the Federal Reserve’s Survey of Consumer Finances to provide that information.

How Much Does The Average American Have In Savings?

Before we discuss any age group breakdowns, let’s get a baseline. According to the Bureau of Economic Analysis, as of June, the overall savings rate in the U.S. was 4.3% of disposable income. What does that translate to in terms of dollars and cents? We can find out by looking at the median and mean savings for the average American. As a note, the median is the middle-most number in a list ordered from least to greatest value; the mean is the average of all the numbers in a given list.

Median

• Cash: $5,300
• Retirement: $65,000
• Investments: $275,300
• Total: $345,600

Mean

• Cash: $41,600
• Retirement: $255,130
• Investments: $1.888 million
• Total: $2.185 million

Average Savings By Age

We know how much the average American has in savings, but how does that break down between age groups?

Average Savings Before 35

Median

• Cash: $3,240
• Retirement: $13,000
• Investments: $141,660
• Total: $157,900

Mean

• Cash: $11,250
• Retirement: $30,170
• Investments: $239,850
• Total: $281,270

Average Savings For Those 35 – 44

Median

• Cash: $4,710
• Retirement: $60,000
• Investments: $89,100
• Total: $153,810

Mean

• Cash: $27,910
• Retirement: $131,950
• Investments: $989,980
• Total: $1.15 million

Average Savings For Those 45 – 54

Median

• Cash: $6,400
• Retirement: $100,000
• Investments: $267,500
• Total: $373,900

Mean

• Cash: $48,200
• Retirement: $254,720
• Investments: $1.962 million
• Total: $2.265 million

Average Savings For Those 55 – 64

Median

• Cash: $5,622
• Retirement: $134,000
• Investments: $467,500
• Total: $607,120

Mean

• Cash: $57,670
• Retirement: $408,420
• Investments: $2.427 million
• Total: $2.893 million

Average Savings For Those 65 – 74

Median

• Cash: $8,000
• Retirement: $164,000
• Investments: $439,000
• Total: $611,000

Mean

• Cash: $60,410
• Retirement: $426,070
• Investments: $2.653 million
• Total: $3.139 million

Average Savings for Those 75 And Older

Median

• Cash: $9,300
• Retirement: $83,000
• Investments: $340,000
• Total: $432,300

Mean

• Cash: $55,320
• Retirement: $357,920
• Investments: $2.031 million
• Total: $2.444 million

Tips For Improving Your Savings At Each Stage

You don’t have to have the portfolio of Warren Buffett, but if you feel like you’re running behind your savings goals, we’ve got some tips to help you improve.

Improving Your Savings In Your 20s

Someone in their 20s may be just out of college. In many careers, you’ll never earn less than you are right now. While it would be a dream to have $100,000 in average savings by age 25, you may have to start with baby steps. That doesn’t mean there aren’t certain things you can do to boost your savings.

• Set it and forget it. The best way to save is to find a way to do it automatically. You might have a certain amount deposited into a savings account every time you get your paycheck. Maybe you have some money set aside every few days. But if the money is automatically accounted for, you won’t be tempted to spend it. In the Rocket Money app, you can set up an FDIC-insured savings account that allows you to make periodic transfers toward a goal like setting up an emergency fund or buying a house.
• Set up a retirement account: You may feel like retirement age is eons away, but it’s never too early to start saving for retirement. If you have a 401(k) with an employer match, not saving for retirement early on could be causing you to leave money on the table. Even if it’s not something sponsored by your employer, setting up an individual retirement account (IRA) can qualify you for tax deductions and even potentially credits. Speak with a tax advisor about your circumstances.
• Put together a budget. By budgeting, you’ll set aside money for your needs, the things you want that make life worth living, and savings. This way you have a plan to set aside money for the future every month or so. The hard part, of course, is sticking to it. If you have the discipline to track your spending, you’re halfway there. Rocket Money can help you both set a budget and keep your spending on track.

Improving Your Savings In Your 30s

Once you’re in your 30s, you’ll want to keep the ball rolling. Even if you feel a little bit behind, these tips could help you build your savings faster.

• Look into escalating retirement savings. Some companies have features of their retirement accounts that allow you to sign up for an auto escalator where the amount contributed goes up with each year you’re in the retirement plan, up to a point. The idea here is that the longer you work, the more you make and the more you can set aside.
• Rebalance and reprioritize. You can place your savings on autopilot. However, that doesn’t mean your life goals and investment priorities should always remain the same. One thing you should do every few years is look at your investments and savings objectives and make sure they still align with your life goals. Retirement fund administrators refer to this concept as rebalancing. Investments are updated based on information you provide and your desired retirement age.
• Take on a side hustle. It’s not saving per se, but a good way to add additional income and potentially follow one of your passions is to do something else in your spare time. It could be anything from 3D printing items to custom knitting to driving a ride share.
• Think of your living situation. The previous tip feeds into this one. Whether you want a family or not, you might be at a point where you’re saving for your first house or looking to buy a bigger one. There are also things like college funds to consider. It’s not a bad idea to talk to a financial advisor about long-term plans.

Improving Your Savings In Your 40s

In your 40s, your primary goal may be to lock in financial stability. We have some tips around that.

• Pay down debt. If you work hard to pay off big items like your mortgage, you eliminate that payment for the future. You also end up saving more money over time because you pay less interest by paying off early. Just make sure you don’t end up paying a prepayment penalty. Our friends at Rocket Mortgage^® don’t charge a prepayment fee.
• Take a look at your discretionary spending. If you haven’t looked in a while, you might check out your discretionary spending budget. Even if you’ve “cut the cord,” for example, you might find that adding up your streaming services is equivalent to a cable bill. That’s one example where it’s easy to change up your subscriptions depending on the shows you’re watching.
• Know your worth. Timing is important, but if you’re coming off a string of good performance reviews and the company sees your worth, it may be an ideal time to ask them to recognize your contribution. If you can’t get it from your current employer, a pandemic-area study from the Pew Research shows that workers who switched jobs saw a higher wage growth than those who didn’t. The more you make, the more you can potentially set aside.
• Gifts come in many forms. As you have access to more money in your career, you may be tempted to spend more on your family. There’s nothing wrong with this, but it shouldn’t come at the expense of your financial future.

Improving Your Savings In Your 50s

Don’t look now, but by the time you’ve reached your 50s, retirement is right around the corner. Here are some tips to get ready.

• Prioritize retirement. When you retire, the ideal is to maintain the same standard of living you had before the regular paycheck stopped coming. Some people may wish to accelerate their savings to make that happen. Fortunately, the IRS allows extra catch-up contributions if you’re over age 50. For 2023, the typical contribution limit is $22,500, but you can contribute up to $7,500 extra beyond age 50. IRA contributions are limited to $6,500, with a $1,000 catch-up contribution limit after 50.
• Dispatch remaining debts. If you’re going to be moving to a fixed income shortly, you’ll want to eliminate as many bills as you possibly can before retirement. We talked about the mortgage earlier, but you may want to give some serious thought to also getting rid of your car payment by paying it off if you have one. The more you can pay off now, the more money you’ll have down the road for retirement.
• Take advantage of senior discounts. We all know someone who doesn’t like to take these as a matter of pride, but if companies are offering to keep money in your pocket, there’s no good reason to spend more than you have to. The age at which discounts start varies, but 50 is often when you’ll first start seeing the offers.

Improving Your Savings In Your 60s

By the time the 60s roll around, you may be retired or close to it. Here are some considerations to make.

• Consult a financial planner. One of the things that comes up in your 60s is the decision on when to take Social Security. If you delay when you elect to take your first check, you can get more every month than if you were to take it earlier, but you may also need to use the money to cover monthly expenses. The Social Security Administration has several calculators you can use to determine your benefit based on when you take it. A financial planner may also be able to help you with planning for health insurance. You may be eligible for subsidies through the healthcare marketplace if you don’t yet qualify for Medicare, but it’s based on income.
• Consider downsizing. Maintaining a big house can be expensive. If you move, you could be closer to family and possibly even buy a house without any kind of house payment if you have the cash. Downsizing also gives you the opportunity to do a big clean out to get rid of things you don’t need anymore.
• Make use of low-cost senior activities. Whether you’re into pickleball, painting or papier-mâché, many communities have a senior center that offers free or cost-effective activities.

Improving Your Savings In Your 70s And Beyond

Close observers of some of the data we shared earlier will notice that for the group who was 75 or older in the Federal Reserve research had less savings available than the younger groups. This makes sense, because by 75, most people are going to be retired. Many people are also paying for long-term care.

At this point, saving money likely isn’t about padding your account balance. Rather, the goal is to stretch out what you have to maintain a high quality of life and care for as long as you can. We have some tips:

• Use what’s included. For those living in care homes or other facilities, you’re already paying monthly to have food included whether you eat it or not, you might as well make sure you get your money’s worth. If you live in a facility, they often go on outings as well.
• Make sure you understand the resources available to you. At some point, you may find yourself really stretching your budget if you live long enough. It’s important before you get to the point of dire straits to know what options you may have through your community, as well as the state and federal government. We recommend consulting with an elder care planning specialist.

The Bottom Line

Trying to compare your goals to an arbitrary average savings target can be a bit simplistic because everyone has different lifestyles and financial situations. However, it does give you some guideposts in terms of measuring how you’re doing.

It’s not so much about how much is being saved, but rather whether you’re thinking about it the right way and taking the appropriate steps. For example, it’s a good idea to set up some kind of retirement fund and save at least enough money in your 20s to hit the company match if available. You also want to periodically reevaluate your savings as your lifestyle and goals evolve over time. As you get older, you may spend more than you save, but make sure you’re always making the most of all your resources.

Download the Rocket Money app to take advantage of super easy budgeting tools. You can also use it to cancel subscriptions you no longer use and to negotiate bills.

Methodology

Rocket Money analyzed the Survey of Consumer Finances (SCF), a study conducted by the Federal Reserve (Fed) every 3 years. We reported both the mean and the median throughout the article, with the median first. We looked at certificates of deposit, savings bonds, directly held stocks, pooled investment funds like mutual funds, and other managed assets like annuities and trusts. Finally, the totals may not add perfectly due to rounding.