Nearly a third of all workers admit to having less than $1,000 saved for retirement. Fifty-seven percent replied that they have less than $25,000 saved. Without knowing the exact retirement savings by age to reach a comfortable retirement, it’s still pretty obvious that the average American is woefully behind.
Below are the stats for the median retirement savings by age in 2013. Based on the recent news of people continually ignoring their retirement savings, I assume today’s numbers aren’t much different. So, here’s the big question, “Is it good enough to be average?”
The average Social Security payout in June 2016 was $1,234.98. Add to that an average spousal benefit of $699.77, and that provides the average couple with an income of $1,934.75.
According to U.S. News, the average cost of retirement per month is $3,411.50. This means that the average retiree needs to come up with $1,476.75 on their own each and every month.
With the typical retirement savings of $148,900, how long could the average couple stay afloat? The answer…approximately 10.4 years… That’s not great news considering the average lifespan of an American is 79 years old.
On average, more than half the population will run out of money and be forced to somehow live on Social Security alone. I’m just taking a stab in the dark here, but I’m guessing you do NOT want to retire in poverty… So, instead of ignoring our retirement accounts, let’s figure out your ideal retirement savings by age!
Retirement Savings by Age – Are You On Track?
For a comfortable retirement today, you’ll need to spend about $45,000 a year. Obviously this amount wouldn’t work for those living in New York or San Francisco, but in most locations $45k will get you what you need, plus a little extra for the fun stuff in life. For a retiree to make this happen today, they would need approximately $750,000 in their nest egg.
So what about for the other ages? How much do they need today to reach this milestone for their retirement years?
Lucky for you, I did the math. For a 25 year old to live the life of a current 65 year old with $750,000, they’ll need to have $29,241 saved up and continue their regular contributions through the age of 65!
If you’re 40 years old, you should already have $162,657 saved.
At 55 years old, you should really have $429,596. Check out your age and see if you’re on track!
Retirement Savings by Age: Summary
Remember the average retirement savings of a 50 year old? Ill refresh your memory — $87,000.
But how much should a 50 year old actually have saved to be on track for retirement? $319,000….
Ummm Houston, we have a problem.
As decades go by, Americans are becoming increasingly oblivious to their retirement needs. Do NOT become one of these Americans. After reading this article, you know exactly how much you need. If you’re below your target, save more. If you’re above your target, you’re rare, but good for you and keep at it!
Where do you land on the “Necessary Retirement Savings by Age” chart? Are you on track for retirement?
Assumptions in the “Necessary retirement savings by age” chart:
- 3.5% avg. inflation
- 8% rate of return on investments
- Consistent contributions of $695 a month
- Assumes no Social Security benefits