The Average Retirement Savings in Every State

For many Americans, retirement savings are coming up short. While financial advisors/experts and commentators typically suggest investors shoot for a nest egg of at least $1 million, there is not a single state in which the average retirement balance is remotely close to that figure, according to data from Personal Capital. The highest average balance in any state — Connecticut- – barely tops $500,000.

Here are some other highlights from the research done by Personal Capital:

The wealthiest state for average retirement savings is Connecticut, at $545,754, with Alaska and Vermont following closely at $503,822 and $494,569, respectively.
North Dakota’s average retirement savings of $319,609 are the lowest in the country.
Average retirement savings, not surprisingly, rise with age. The average balance for those 45 to 52 is $179,200, rising to $256,244 for those 55 to 64 and $279,997 for those already retired.
Among ethnic groups, white household groups have the highest median retirement savings, at $79,500, with Latinx households having the lowest at $23,000.
Men on average have more than double the retirement savings of women, at a median of $91,000 vs. $43,000.

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While numerous factors are dragging down the averages, perhaps the biggest is the low participation rate in American retirement accounts. According to the Federal Reserve’s Survey of Consumer Finances, only 54% of Americans had a retirement account in 2022. This means that nearly half of Americans didn’t have a retirement account at all. The average Social Security payout for retired workers was just $1,909.01 as of January 2024, this leaves a lot of ground to make up.

Simple math shows that the power of compounding returns makes building a seven-figure account balance easier the younger you are. But it’s never too late to start. If you’re already in your 30s, 40s or even 50s, you’ll be playing catch-up for sure, but there are some steps you can take to leverage your savings rate.

The first is contributing as much as you can by making some changes to your budget and lifestyle. Prioritize your retirement plan by saving first and then living off your remaining funds, rather than trying to save what’s “leftover” after all your spending. No matter how tight your budget is, you can always turn up a few extra dollars somewhere. Eating out less, trimming your streaming subscriptions, even walking to work or taking public transportation may save you enough to help fund a viable retirement plan.

For an even bigger impact, consider downsizing your home, moving to a cheaper location in town or even living in another state. These types of steps could potentially save you hundreds or even thousands of dollars off your monthly budget.

Next, take advantage of the many advantages that retirement accounts offer. All tax-advantaged accounts, from traditional and Roth IRAs to 401(k) plans, offer tax-deferred growth while your money is in the account, and Roth IRAs also allow for qualified tax-free distributions. Money you take out of a traditional IRA or 401(k) is fully taxable, but you’ll get a tax break on the money you contribute. And 401(k) plans offer the closest thing there is to free money in the form of the employer match, in which your company will deposit a certain percentage of your own contributions directly into your account. All of these factors can help to ramp up your balance quickly.

But the benefits don’t stop there. Once you reach age 50, the IRS allows you to kick in even more to your retirement accounts. For example, if you have an IRA account, in addition to the maximum allowable contribution of $7,000 for tax year 2024, you can sock away another $1,000 if you’re 50 or over. For a 401(k) plan, the benefit is even greater. On top of 2024’s maximum contribution of $23,000, you’re allowed a catch-up contribution of $7,500, meaning you can put up to $30,500 per year in your 401(k).

Where you live can also play a big role in terms of how far you can stretch your retirement savings. While North Dakota may have the lowest average retirement savings of any state, at $319,609, it also has a very low cost of living compared with states like Connecticut or Hawaii. A nest egg even a few hundred thousand dollars less may be enough to live a comfortable retirement in these types of states, or even in lower-cost areas of more expensive states.

Lastly, deferring your retirement date by even a few years can pay big dividends when it comes to the quality of your retirement lifestyle. With more years to earn, you’ll have both more time and more income to contribute to your investment accounts, which in turn will have more time to compound in value. Working longer can also potentially raise your ultimate Social Security benefit, as it’s based in part on your 35 highest-earning years. Waiting to file for benefits past the current full retirement age of 67 can also boost your payout by a significant 8% per month for each year, up until age 70.

With all of these factors in mind, here’s a look at the average retirement account balances on a state-by-state basis, as determined by Personal Capital.