On average, Americans have around $141,542 saved up for retirement, according to the “How America Saves 2022” report compiled by Vanguard, an investment firm that represents more than 30 million investors.
However, most people likely have much less: The median 401(k) balance is just $35,345.
That means half of account balances are lower than this amount and half are higher. And since averages can be skewed by a few outliers, the median account balance is considered to be more representative of what most people actually have saved in their 401(k) accounts.
Here’s a look at how much money Americans have saved for retirement, by age:
Besides age, many other factors influence retirement savings, such as income and how long an employee has worked for a company. Older employees who have been working longer tend to have higher account balances than employees who are just beginning their careers, for example.
But try not to fixate exclusively on your exact balance. “If you focus too much on your account balance, you may be tempted to react to short-term volatility at the expense of your long-term financial goals,” says Nilay Gandhi, senior wealth advisor at Vanguard.
Instead, Gandhi encourages investors to focus on factors they can control, such as expenses, investment choices and their savings rate.
“We believe participants need to reach a total saving rate of 12% to 15%,” including employer contributions, says John James, managing director of Vanguard’s institutional investor group.
Don’t panic if you’re not there yet — most investors aren’t.
Here’s the average retirement savings rate for investors at every age:
Gandhi recognizes that reaching the recommended retirement savings rate of 12% to 15% can be daunting for employees, especially the ones who are just starting out.
It’s OK to start with what you can afford. However, “be sure to save at least enough to get your employer’s full match,” Gandhi recommends.
From there, “increase your savings rate by 1% to 2% each year until you achieve the target savings rate of 12% to 15%.”
Vanguard provides a free Retirement Income Calculator that anyone can use to estimate how much money they may need after they retire. The tool takes specific individual factors into account, including current age, anticipated retirement age, current income, savings rate, expected income needs in retirement and additional income sources.
You can also check out CNBC Make It’s retirement planning tool that can help you calculate how much money you’ll need to retire comfortably based on your age and income.
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