The answer to this question will depend on your income, expenses and saving habits, among other factors. One reliable source to help you get an estimate could be the Federal Reserve. Here’s what the retirement account data shows and how you should use this benchmark for your retirement planning at age 50.
If you’re falling behind on your retirement savings goals, a financial advisor can help you create a personalized plan.
Average Retirement Plan Savings By Age Group
The Federal Reserve publishes its Survey of Consumer Finances roughly every three years, which is a comprehensive report for overall household income, finances and wealth.
According to their retirement account data, individuals between the ages of 44 and 54 averaged $313,220 in 2022. This is almost an $18,000 increase in three years, when the average was $295,270 in 2019.
For a wider comparison, here’s a breakdown of the mean or average retirement account savings for all six age groups in 2022:
- Under 35: $49,130
- Between 35 and 44: $141,520
- Between 45 and 54: $313,220
- Between 55 and 64: $537,560
- Between 65 and 74: $609,230
- Age 75 or older: $462,410
As you can see, data from the survey is based on 10-year cohorts. Another way to look at these retirement accounts is to filter for the median or middle value of the data set. In doing so, the median retirement savings between ages 45 and 54 falls to $115,000 in 2022. This is slightly lower than the amount for 2019, which was $115,920.
For a comparison of all six age groups in the Federal Reserve survey, here’s the 2022 median breakdown:
- Under 35: $18,880
- Between 35 and 44: $45,000
- Between 45 and 54: $115,000
- Between 55 and 64: $185,000
- Between 65 and 74: $200,000
- Age 75 or older: $130,000
How Can You Use This Retirement Savings Benchmark at 50?
Retirement benchmarks could help you estimate how much you should be saving for retirement. These benchmarks, like in the Federal Reserve’s survey, can include targets for retirement account balances, such as multiples of annual income or specific savings milestones by certain ages. However, the numbers may not reflect your financial reality.
There’s no financial relevance to measuring how you compare against other households. When it comes to evaluating where your savings are, the issue is how you compare with what you, personally, need. In other words, what will it cost for you to keep your desired standard of living in retirement?
For your retirement savings plan, there are some things that you can control and others that you cannot. Therefore, you should be looking at factors that will determine your specific finances. These can include your expenses, debt, income and investments, as well as interest rates, inflation and market volatility.
Comparing current savings to other retirement benchmarks can help you assess your progress toward your retirement goals and position you to make adjustments when certain factors change. While personal factors should outweigh broader benchmarks, data from the Federal Reserve survey and other sources can still help you gauge where you may want to be on your path toward retirement.
How Much Should You Have Saved for Retirement at 50?
In general, by age 50, Fidelity says that you want to have about six times your annual income in retirement savings. So, for example, with a national median personal income around $40,500, you would want about $243,000 in your retirement account by age 50.
This estimate, of course, will largely depend on your specific income and age. Using Fidelity’s rule of thumb, here’s how much you should have saved from ages 30 to 67:
- Age 30: 1 x your annual salary
- Age 35: 2 x your annual salary
- Age 40: 3 x your annual salary
- Age 45: 4 x your annual salary
- Age 50: 6 x your annual salary
- Age 55: 7 x your annual salary
- Age 60: 8 x your annual salary
- Age 67: 10 x your annual salary
One thing that is clear from the Federal Reserve’s survey is that many households are well shy of this mark.
“Among families in the bottom half of the distribution, the mean balance for participating families decreased between 2019 and 2022, from $66,600 to $54,700,” the survey said, referring to those who held assets in IRAs and DC plans like 401(k)s. “In contrast, the mean balance for participating families in each of the higher-earning segments increased more than 10 percent—to $226,700 for the upper-middle income group and to $913,300 for the top decile.”
These are concerning numbers. So, for you, the biggest question is: How this can help spur you into action in your own life?
How You Can Catch Up On Your Retirement Saving Goals
The first thing to do is to make sure that you’re on top of your own savings and planning: Do you have a retirement account and, if possible, can you double up your savings by holding both an employer-sponsored plan and an IRA?
Next, cross-check your savings goals against your income: How much do you make right now, and what will it cost you to maintain your standard of living in retirement? Most households are well behind where they need to be in retirement, and if you are among them at age 50, it’s time to consider accelerating your savings with catch-up contributions and perhaps an additional taxed portfolio.
Finally, make sure to keep an eye on your own future goals. Data sets like this can be a useful wakeup call, but your targets should be based on your needs and finances. Set a goal for where you want to be at age 60 and start working towards it, not based on the Federal Reserve survey alone but your personal needs.
Bottom Line
The mean or average retirement account savings for individuals between the ages 45 and 54 was $313,220 in 2022. The median or middle value for the same time period is just over a third: $115,000. While retirement benchmarks can help guide your retirement goals at age 50, they may not reflect your financial reality. Therefore, you must account for personal factors when creating a retirement plan to pay for future needs.
Tips for Retirement Planning
- It’s never, ever too late to start saving for retirement. Whether you’re 40 or 50, you still have time to build a comfortable future for yourself. Here are five steps to help you catch up.
- A financial advisor can help you tailor a specific retirement plan to for your individual needs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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