There are many concerns among those who are putting their income into savings for retirement. The questions range from how much the average retirement savings should be, to how much the average retirement saving by age to better keep track of the amount.
The truth is that there is no exact science as to how much retirement savings you need. There are many variables that come into play. What is known are factors such as the average retirement age, how much savings by age is average, and how much the average person or couple has saved by the time they are ready to retire.
Average Retirement Age
Today, the average retirement age for men is 63 years old in the US. Women tend to retire earlier at the age of 60. This may reflect the age disparity in many couples where the men tend to be a few years older than their wives. Since couples tend to retire together, the man tends to be a few years older.
What is the Average Retirement Savings by Age?
As you can see with the graph, the average retirement savings by age group grows considerably from the 18 to 24 range which is next to nothing up to well over $200,000 for those ages 50 to 59. The savings are maintained over the $200,000 mark until the age of 75 when the decline begins. This decline is rather predictable given that the longer people are out of work, the lower the amount of savings will remain.
When all the age groups are added together, the average retirement savings for all those 18 and above is $65,000. The average is rather deceptive in the sense that people under the age of 40 have had less time to save for their retirement. In addition, those under the age of 40 are still paying for major expenses such as buying a home and raising their children.
Once the children are on their own and the house has been paid for, more of their income can be directed at their retirement. What is interesting is that most Americans believe they need roughly $1 million in savings to adequately retire. However, the average amount for most people who reach retirement is less than a quarter.
Savings for Retirement
As the graph along with the data shows, savings for retirement starts off relatively small for the age group of 18 to 24. It rises considerably starting around the age of 30 before briefly leveling off around the age of 50. This may be the time of greatest expense for most people as they are still paying off their homes and sending the kids to college.
However, by the age of 55 it rises sharply again as more of the income can be directed at the retirement savings until it peaks around the age of 60. This means that the average retirement savings for those about to retire in the US is just over $233,494. By understanding the levels of the average retirement savings by age, a person can then better plan their finances to prepare for their future.
Using and intreactive retirement savings calculator you can find out how much you would be able to save if you start saving at the current age.