Written by Today will be answering the question. What is the median retirement savings by age? And we’ll let you know whether that’s enough for your retirement savings.
When it comes to the amount of savings that you’d want to have for retirement by age, where we’re really going to break it into like twenties, thirties, forties, fifties, and sixties. I mean, that’s roughly a good place to have it set at. The data that we’re going to get is coming from the Trans American center for retirement studies.
Then we will discuss how much people actually have roughly their medium by each of the ages. And then we’ll talk about just maybe a decent gauge. It’s obviously very difficult to say how much you would personally need without knowing like your entire financial situation. That means like your debt, your lifestyle, the city you’re living in, things like that.
But I can give you at least a rough range to have a feeling. What I can tell you up front is the median amount that people actually have and the amount that they’d roughly want to have, there’s a big difference between the two. Now, when I’m coming up with the numbers, what I’m going to do is I’m going to take the median income in America, and then I’m going to extrapolate the numbers that you’d roughly want to have saved based on that.
Median Income
Currently in 2022, the median income is $67,521. If you’re making that amount of income, then we’ll give you the numbers based on that. And if you make a little less than that, make it a little more than that. You can sort of do the same amount as far as the calculations, but I will let you know how to do that.
So first and foremost, when you’re in your twenties, it’s roughly estimated that the median household has about $16,000 saved towards their retirement, which is fine. Most of the data that you’ll see, they don’t actually really talk a lot about the amount that you want to have in your twenties.
The big thing is we encourage you to get started in your twenties. You know, there’s lot today that shows if you allow compounding interest from your investment. Someone who starts in their twenties invest link the numbers like $8,000 a year. For 10 years, they would end up investing more than someone starting in their mid thirties. Investing $8,000 a year until they retired at 65.
Get started early
Just because of the way that compounding interest works. Even if you’re getting the same return. So we always encourage you to get started in your twenties. I wouldn’t be as concerned as much about the money because that’s going to come. But if you build the habit of living in a certain amount of your means where you’re able to put a certain percentage of your income away, I would say roughly, if you’re able to at least put 5% of your income away, then you’re off to a good start and then you want to. If you can build it up to 10, 20%, that would be a really good place to start.
Build healthy money habits
You want to build those healthy habits. Most of the time. What I see is when people in their twenties, when they’re saving money, it’s not that they’re saving it for their retirement. They’re saving it for a car. They’re saving it for a baby or they’re saving it for a house. Right. We’re saving it for a large expense because we have a lot of things going on when we first leave out into the world.
So if you’re able to just get in the habit of saving money for saving sake, just so that your money can grow and then it can give you the freedom that you need to make a lot more choices as far as how you spend your time, because you don’t have to trade your time for money. And instead you’re trading your money for time, which is a great place to be.
Median Income in your 30’s
When you’re in your thirties, the median retirement savings is $45,000. That’s what is actually in the accounts of most people in their thirties. Now, roughly you’d want to have somewhere around one to two times your income. That will be a good number to have. So if you’re somewhere around that median income of $67,000, then you’d want to be around $140,000 saved for your retirement in your thirties.
Median Income in your 40’s
As you move into your forties, the median amount people have saved is $63,000. But at that age, you want to have three to four times your income. So you’d want to be closer to $300,000. So you’d want to have, if the median income is 67, if that works for you, then you’d want to have around $270,000 saved by the time you’re in your forties.
Ideally, a good way to think of it is you really want to get very close to about in your fifties that we’re really close to at least about half of Income is coming from our money. So that way we have a lot more flexibility, a lot more freedom. We’re able to make a lot more choices that are beneficial to you, where you’re not thinking as much about your money and responsibilities and your debts, but you’re able to start thinking about your passions and your purpose and in the enjoyment that you have in life, your family, your business, things like that.
Median Income in your 50’s
As you move into your fifties, you would like to be somewhere around half a million dollars. So you want to have about 500. If you’re using the median amount of 67,000, you’d be somewhere around six to seven times your income. And that’s where you would gauge yourself as far as if you’re doing okay in keeping on track, that would roughly be around $470,000.
If you’re seven times that income. But I usually would say, look, try to get close to that 500,000, get close to that half a million. Most people when they’re in their fifties, they have about $117,000 set aside for their retirement savings. And that’s usually the median that they’re at as you move into your sixties.
And that’s where most people are starting to get to the point where they’re like, okay, I’m going to retire now. Granted, if you can get to the numbers earlier, then by all means, make the decision earlier. If you’re someone who genuinely enjoys what you’re, then push the number back. We’re just simply talking about the median amounts this is what’s generally happening, but it doesn’t mean that has to be your plan and your amounts.
Median Income in your 60’s
If you are going to be in your sixties, you want to be around 8 to 10 times your income. So if you are at the point where you really want to say, you know what, I’m going to go for it, then you probably want to be around 8 to 10 times your income. that amount ends up being if you own the medium.
About $680,000 is going to put you around 10 times at your income. Generally, you’ll hear most people say you really want to get to at least a million dollars. The reason is pretty simple. You’re going to be living off of the return that your investments are making and your returns have to cover things like inflation.
And that also has to cover just whatever livelihood and expenses and lifestyle that you want to have in retirement. So if you’ve gotten more conservative where now you have about 5% as your returns in your sixties, because you don’t have really that extra time to be losing a significant portion of your money.
So instead of getting maybe that 10, 15, 20, whatever the return you were getting now you’re down in that 5% range. And you would be living off of 5% of your income. So if you’re living off of 5% of 675,000, that’s about $33,000 a year. Now that amount, depending on your situation may work for you. However, it is possible that amount doesn’t work for your retirement lifestyle.
Become a millionaire
I would generally encourage you to try to get at least to that million amount. And maybe what that means is we have to maybe go slightly longer. To get to that amount, but I find that you’ll enjoy your retirement a lot more. Just based on the inflation of the value of the dollar, the time that we’re all living, things like that, you’ll feel a lot better.
And so you’d want to have a plan that puts that in place. Now at the same time, if you are going to retire even longer, if you’re someone that wants to retire like early, then you’ll you’ll need more than that amount, of course, because you’re going to be retired for a lot more years. So you’ll need a larger amount because you’ll probably still have a lifestyle of certain bills and certain things where you can’t really get your expenses underneath that $30,000 range doesn’t mean you can’t. I’m just saying generally speaking, that’s just how the numbers end up working. So once we get retire, once you know, we’re empty nesters, everybody’s gone.
Retirement lifestyle
We not maybe as active in our business, whether we’ve given it to the next generation or we sold it. However that worked out for you, you generally are like, okay, I’ve paid off a lot of things. I’m able to just use this money for my retirement, my lifestyle, my enjoyment. And so you’ll just make that decision that makes the most sense to you.
Now, if you’re wondering what people actually have, the median retirement savings that people actually have is $172,000, according to the Trans American center for retirement studies. So on average people actually have $172,000, and then they’re making their decisions from there, as far as the lifestyle that they have and what they’ll end up doing.
Final thoughts
If we don’t have the number that we have, then we may be able to have like a mini retirement. Maybe you take off a few years to travel. See some things with your family. Enjoy life a little bit with the plan of coming back to working in five years. Or even in 10 years in a different capacity. That could be an option for you.
It may make sense for what your plan is. Others, they just want to keep working so that they can make up for the difference. And so they’ll just be able to save a lot more where people are saving 50 60, 70% of their income in the last, maybe five years. And so they’re able to make up a lot of lost ground and put themselves in a really good position.
But I did want to share with you what the median retirement savings is by age. And roughly how much you actually would want to have.
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