Average Retirement Savings By Age

January 22, 2021 · 8 minute read

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Average Retirement Savings By Age

When saving for retirement, it can be helpful to see how one compares to others in their age range. Averages can help investors see if they are on track to retire when they plan to.

While each person is different in terms of their personal retirement goals, lifestyle, ability to save, and projected expenses, setting goals and benchmarks can help an individual figure out how much to save and where to put money for retirement.

Average Age of Retirement in the US

Average age of retirement varies by state. According to the U.S. Census Bureau’s American Community
, Hawaii, Massachusetts, and South Dakota residents retire at the average age of 66. Washington, D.C., residents aren’t retiring until 67, and residents of Alaska and West Virginia retire around age 61.

The average retirement age nationally is 64, although most people in the United States want to retire by age 67. That’s a good thing—as 67 is now the official retirement age for people born after the year 1959.

Although many hope to retire on the younger side, this isn’t always possible. Saving and preparing for retirement is becoming more challenging, and people have more decisions to make than ever, so it’s important to plan ahead. Start saving for retirement today with an individual retirement account from SoFi Invest

Chart: Average Retirement Savings By Age

Let’s take a look at the average retirement savings by age for people between 30-69. The table below shows the average amount of retirement savings, based on research from the 2019 Survey of Consumer Finances , the Federal Reserve’s most recent survey to date.

Age Group

Average Retirement Savings

< 35 $30,170
35-44 $131,950
45-54 $254,720
55-64 $408,420
65-74 $426,070

Average Retirement Savings by 30

Most Americans in their 20s and 30s haven’t reached their peak earning years, and many might be paying off student loans, and saving up to buy a house or have kids. Retirement isn’t always top of mind. But the earlier people can figure out which retirement plan is right for you and commit to actually starting a retirement savings plan, the more they will benefit from compound interest over time.

Many millennials are stressed about saving for retirement and not having enough to live on in their older years. More than half of millennials over age 35 have started saving for retirement.

Recommended: How to Save for Retirement at 30

Average Retirement Savings by 40

Since most people are making more money at this age than they ever have, it can be tempting to start spending it on fancy vacations, cars, and other things. But those who put that money towards retirement may be able to reach their goals early and retire young.

For men, these are peak earning years, as they tend to continue increasing their earnings until age 55. Women tend to reach their peak earnings much younger at age 44. Either way, retirement savings should be top of mind for people in this age group.

Average Retirement Savings by 50

At this age, some Americans are on track to reach their retirement goals, while others are far off. There are still ways to catch up, such as cutting unnecessary expenses, moving to a smaller home, or putting any pay bonuses into retirement accounts.

Average Retirement Savings by 60

Although the dream is to retire at this age, many Americans have to keep working since they don’t have enough saved. In some cases, people plan on working at this stage of life anyway, so it’s not a bad thing. In fact, over half of workers say they plan on working during retirement, but out of those, 35% say it’s partly because of a lack of savings. Ideally working in later years of life is a choice and not a necessity. After this age, people tend to be spending rather than saving, so the average retirement savings amounts decline.

Contributions tend to increase as people age partly because they are earning more and partly because they are thinking about retirement more.

Start saving for retirement today
with an IRA from SoFi Invest

Ideal Retirement Savings Amounts by Age

The “80% rule” used to be the rule of thumb by which to calculate retirement savings. This rule says that one should save enough to have 80% of their current salary per year of retirement. So if someone makes $75,000 per year, they would want to have $60,000 per year during retirement.

Some industry experts recommend that the average 65-year-old have between $1 million and $1.5 million in retirement savings. But typical retirement expenses can vary from person to person. One might spend less on clothing for work or beauty supplies, but more on healthcare and recreation. Retirement years are also unpredictable, as health issues and other expenses might come up.

Still, it helps to get a sense of the average spending during retirement. In 2018—the most recent year for which statistics are available—the average annual spending by Americans 65-74 was $56,268. For those over age 75 it was $43,181.

When Can I Retire?

People who wonder “When can I retire?” might first decide to use this retirement formula to help calculate how much money they’ll need in order to retire comfortably and be financially secure for the rest of their life.

Because the cost and standard of living varies so greatly, there aren’t clear dollar figure amounts that each age group should aim to have saved for retirement. But there are suggested guidelines.

How Much Retirement Should I Have Saved by 30?

It’s recommended that people save an amount equal to their annual salary by the time they reach age 30.

One way to achieve this is to save 10-15% of one’s gross income starting in their 20s. Some employers will match retirement contributions if employees save a certain amount each month, so it’s a good idea to contribute at least that much to take advantage of that free money.

How Much Retirement Should I Have Saved by 40?

It’s recommended that investors have three to four times their annual salary saved by age 40.

How Much Retirement Should I Have Saved by 50?

Investors are typically advised to have six times their salary saved by age 50.

How Much Retirement Should I Have Saved by 60?

It’s recommended that investors have eight times their salary saved by age 60.

How Much Retirement Should I Have Saved by 67?

Investors are typically advised to have ten times their salary saved by age 67. For example, if a 67 year old makes $75,000 per year, they should have $750,000 saved.

Is Anyone Saving Enough for Retirement?

Despite the above recommendations, most Americans don’t have nearly these amounts in their retirement accounts.

Research released by the U.S. Government Accountability Office (GAO) in 2019 estimates that about 48% of Americans over age 55 don’t have any retirement savings at all. And things look even worse for younger generations. Nearly 60% of millennials don’t have any retirement savings either.

In terms of gender, on average women have about $23,000 in retirement savings; men have $76,000. Fewer than 50% of women say that saving for retirement is a priority for them, as opposed to 62% of men.

Social Security and Your Retirement

It’s more important than ever to create a retirement plan and stick to it, because America is facing a retirement crisis. Social Security was designed to help people pay their expenses during retirement, but it currently pays less than half of the average retiree’s monthly expenses. In 2020, the average monthly Social Security
for retirees was $1,544. This number is expected to continue to go down.

Best Ways to Save for Retirement

It can be stressful to feel behind on saving for retirement, but it’s never too late to start.

We’ve put together the top 7 ways to save for retirement—starting with creating a budget to track expenses. This allows you to see where your money is going and identify categories of spending that could be reduced, with the money redirected to a retirement savings account.

Some retirement plans also have catch up options for those who start late—typically, individuals older than 50 can contribute extra funds to their retirement accounts.

No matter how much you put aside for retirement, or whether you contribute to a traditional IRA or a Roth IRA, a 401(k) or an after-tax investment account, a good strategy is to automate savings. With automated savings, the money is deducted from your paycheck or your bank account automatically—making it easy to forget that the money was ever in the account in the first place.

The Takeaway

Knowing how much others in your age group are saving for retirement can help give you a sense of comparison, but it’s important to remember that most Americans aren’t saving enough.

There are a number of different formulas, calculations, and rules of thumb to help individuals figure out how much money they’ll need in retirement. While these figures can be helpful, it’s also important to take personal goals, financial responsibilities, and lifestyle into consideration.

There are several ways to start saving and investing starting now—no matter what your age. SoFi Invest® offers both retirement accounts as well as other ways to invest, from ETFs to individual stocks.

Find out how SoFi Invest can help you with your retirement goals.

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