Here's How Much the Average American Has in Retirement Savings

If fears about running out of money in retirement have kept you up at night, you're definitely not alone. Saving enough for your future and stretching that money across decades aren't easy tasks.

Though you may not be where you want to be right now, your savings might not be as far behind the average American's as you think. And for many, there's still plenty of time to turn things around.

Person holding tablet and looking at papers.
Person holding tablet and looking at papers.

Image source: Getty Images.

How much does the average American household have saved for retirement?

Many workers estimate they'll need $1 million or more to retire comfortably, though the typical American doesn't have anywhere close to that. The average household retirement account balance in 2022 was just under $334,000, according to the latest Survey of Consumer Finances.

Before you panic, you should note that averages can be misleading when talking about finances. This is largely because they include the ultrarich, who probably have tens or even hundreds of millions of dollars stashed away. Looking at median savings -- how much the household in the exact middle of the dataset has -- paints a more realistic picture of how American retirement savers are doing.

Median savings were just $87,000 in 2022. There are a few things worth calling out here. First, this is household savings, not individual savings. If you're married, compare your and your spouse's combined savings to see how you stack up to this, not each person's individually.

Second, this takes into account all types of workers and families. It includes the young, single adult just starting out in the workplace, all the way up to those on the doorstep of retirement. So while it can be comforting to know that you might not be as far behind the typical American as you'd thought, this $87,000 figure doesn't tell you a lot about how you stack up to others at your point in life or to what you actually need to save for retirement.

Focus on what you need

Rather than worrying about how your savings compares to others, work out how much you believe you'll need for retirement, and build a plan to achieve it. Start by taking note of how much you have in all your retirement accounts. Don't forget about accounts you may have had through previous employers.

Next, figure out how much you need to save per month in order to reach your goal. A retirement calculator can help here. If you expect a 401(k) match from your employer, subtract this from your monthly savings target to figure out what you have to set aside on your own.

When this number is within reach, your path forward is pretty simple. Keep working, and remember to set aside money every month. Things are trickier if you're not able to save as much as you'd like right now. You'll have to make some changes, but you have options.

First, you could adjust your retirement plan -- perhaps delaying your retirement date by a few months or years. This gives you additional time to save and enables your investments to grow further, while also reducing the length and cost of your retirement. But not everyone wants to shorten their retirement.

You could also look for ways to increase your savings rate in the present. This could mean cutting other expenses, finding a better-paying job, or starting a side hustle. If you don't think you can boost your savings drastically, aim for increasing your contributions by 1% of your income annually. That's just $50 more per month for someone earning $60,000 per year.

And remember, you're not doing this alone. You're hopefully investing your savings, and a lot of the money you'll live off of in retirement comes from earnings on those investments. Just keep at it, and check in with yourself once or twice per year to see if you're on track and if you can identify any new opportunities to boost your savings.

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