Average Savings by Age

Average Savings by Age

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Saving money is something recommended by every financial expert in the world, but unfortunately, it’s something far too few people manage to accomplish.

Whether you need to save a few thousand dollars for an emergency fund or you are working toward saving as much as possible for retirement, you need to make saving a priority. Assessing where you are versus other people with similar circumstances to yours can help you determine if you’re on the right track.

Part of the struggle to save is due to the fact that the cost of living has increased so much over the last decade or so, but earnings have not kept pace. The cost of food has increased by more than 50 percent, but there are few people who have managed to double their earnings during that time.

People are choosing to and being forced to live beyond their means. For many, just making ends meet each month is a struggle, let along putting money aside for savings.

According to data from Moody’s Analytics about 10 years ago, the average person younger than 54 years old had a negative savings rate. Those aged 44 and younger average a negative savings rate of 10 percent. This means they were not only saving, they were reducing whatever savings they had by 10 percent.

Has the Problem Improved Over the Last Decade?

In order to assess where you are compared to most Americans when it comes to saving, there are a few things to consider. First and foremost is your age. Many would argue it’s more important for older people who have retired or are nearing their non-earning years to have more savings than a younger person with many working years ahead.

Of course, this doesn’t diminish the importance of saving when you are younger. In order to have built a decent nest egg, you’ll need to begin saving as early as possible. People in their 20s and 30s should already be thinking about retirement.

Investing when you’re young can pay off big, too. Even if you’re only able to put away a small amount, interest will work in your favor. For instance, a 35-year-old saving just under $1700 and investing it in the stock market for 30 years, would end up with $12,500 in today’s dollars by the time he or she reached retirement age.

Statistics show this isn’t really the case, though.


People younger than 35 – also known as the millennial generation – have a negative savings rate. In 2009 this same group was regularly saving about 5 percent of their income.

Since then there’s been a steady downshift and many are feeling the pinch of their student loan debt. For the past few years, the average millennial has lost money. If you’re younger than 35 and managing to save anything, you are better off than your peers.

Savers in their Forties and Fifties

Millennials aren’t the only ones falling short when it comes to saving. Generation Xers – middle aged people currently in their late 30s through 50s – are in the prime of their career and therefore, their prime earning years. Many of them are earning respectable salaries that provide a steady income and an opportunity to save for emergencies and feed money into their retirement savings. Many have them have also managed to pay off their student loans.

But it’s during this time in life that expenses tend to rise. Children are growing up and thinking about college. New cars or cars for kids are needed. Aging parents might need financial assistance. Many Gen Xers are still struggling to make ends meet and have already fallen behind in their effort to save for retirement.

The median savings for people in their 40s is $63,000, which is well below the recommended amount of money needed for a solid nest egg. Financial experts recommend that in addition to three or more months or emergency savings, people should aim to have three times their annual salaries in their retirement nest egg.

Your 50s and Beyond

People in their 50s have managed to save more – about $117,000 – but they’re still far below that’s desirable at this point. After all, you’re only about 15 years away from retirement when you’re in your 50s. Financial experts recommend by the time you reach this age you should have at least four to five times your current annual salary in savings. Many recommend downsizing and finding other ways to cash in on what you’ve built thus far. If you haven’t already, your 50s is a great time to meet with a financial planner to review where you are and what needs to be accomplished to get you to where you want to be.

If you’re in your 60s, it’s time to enjoy your retirement and put to good use the money you’ve saved. It’s recommended you have six times your annual salary invested in savings by your 60s, but the average person in his or her 60s has far less than that. Median estimates show savings of about $172,000 for people in this age group.

Keep in mind, much of what you need is based on your lifestyle. That’s why retirement recommendations are based on your current earnings. If you’re able to save the recommended amount based on your salary, financial experts believe you’ll be able to maintain your current lifestyle, minus a few adjustments.

If you’re willing to cut back once you retire or you intend to work longer than the average person, you can adjust your savings goals based on those factors. This is another reasons it can help to meet with a financial expert – he or she can give you guidance based on your specific circumstances.

What You Can Do

If you haven’t begun saving yet, now is the time to begin. Hopefully it’s still early enough to make up for any lost time. Focus first on an emergency savings that equals about three to six months of your monthly income. So, if you earn $2000 per month, you’ll want a minimum of $6000 in savings, but ideally $12,000. Once you have money for emergencies, you can focus on saving money for others things, including retirement.

If you’re struggling to make ends meet, let alone save money, you aren’t alone. Many Americans are struggling to get by and have little left over for savings. For more information or to discuss your financial situation with someone who can help, contact us at 1.800.220.4318 to schedule a consultation.

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