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Here's how much the typical American has saved for retirement at every age

boomer and millennial

  • The typical American's retirement account looks very different depending on their age, according to data gathered by Personal Capital
  • The wealth management company analyzed 337,000 linked retirement accounts and sorted users into 10-year age brackets to find the median balance of each age group's retirement accounts.
  • The typical 20-something has about $34,000 in their retirement account, while the typical 60-something has $642,000.
  • But, the typical 60-something still doesn't have all that much saved when considering that Americans are living longer. To live on $65,000 per year, it would actually take about $1 million more. 
  • Read more personal finance coverage.

Retirement savings need plenty of time to grow, and younger people appear to be taking this to heart.

New data from Personal Capital looks at the median retirement account balances of about 337,000 Personal Capital users ages 20 to 69. The data includes all types of retirement accounts, including IRAs and 401(k)s, but does not consider any other linked accounts — like checking or savings — and excludes spousal accounts. 

Millennials seem to be getting a good start on their savings, with Personal Capital's typical 20-something client carrying a balance of about $34,000 in their retirement accounts. Between ages 20 and 49, account balances nearly triple for every 10-year age bracket.

Here's how much the typical American has saved for retirement at every age Chart

20-somethings are off to a strong start

According to a 2019 survey from Morning Consult and Insider, over 45% of millennials have a retirement account. Starting early is especially important when it comes to retirement, because one of the biggest factors that helps retirement savings grow is compound interest, where money saved generates interest on itself. The more years this process has to work, the more savings will grow.

Personal Capital's data looked at over 40,000 linked retirement accounts from millennials. With the median balance for 20-somethings at $34,006 and more than 30 years before retirement age, millennials' retirement plans are well on track.

"If you waited an extra 10 years to start saving for retirement, you could be missing out on over half of the possible savings," Amy Oulette, a financial planner and the director of retirement services for Betterment and Betterment for Business, previously told Business Insider. Saving sooner rather than later can help.

The typical 60-something hasn't yet hit $1,000,000, and that could be a problem 

While millennials are doing well with their saving, the older generations seem to have slowed down, and this might leave them with less than they thought in retirement. The typical 60-something has just over $642,000 saved, which sounds like a lot of money — until you realize it might have to support you for the rest of your life. 

Business Insider's Tanza Loudenback calculated that a person who retires at age 65 would need about $1.6 million in their investment accounts on the day they left work to live on $65,000 per year. According to this data from Personal Capital, many in their 60s are falling short of that benchmark. 

Even for a couple who shares living expenses on two retirement accounts, the combined amount falls over $330,000 short of the amount they'd need to live on $65,000 per year.

In many parts of the US, $1 million in retirement money won't even last 20 years. And, estimates on healthcare costs from Vanguard project that a typical 65-year-old retired couple will spend $197,000 in healthcare expenses alone during their retirement, or just about 30% of what the typical 60-something has saved. 

According to a survey by Charles Schwab conducted in 2019, the average American felt that they'd need to save $1.7 million to retire comfortably. But, getting to that point is harder than it sounds. While we can't draw conclusions from millennials' and boomers' respective balances, we can look at these numbers through the lens of someone who eventually wants to retire: Retirement is expensive. Start saving now.

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