How Do Your Retirement Savings Compare to the Average American’s?

September 19, 2022, 6:00 AM

Planning for retirement requires thoughtful money management and careful planning. When it comes to retirement, curious glances at what other Americans are doing to prepare are a helpful way of assessing where you fall on the preparedness spectrum: Are you totally ready or woefully unprepared?

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Take a look at the results of GOBankingRate’s recent survey to obtain the latest insights on how much Americans are saving for retirement and how to best prepare for this expensive life phase.

A Third of Americans Have Less Than $10K Saved

Many Americans have a long way to go when it comes to affording retirement. According to the survey, 36% have less than $10,000 saved. Not far behind them is the 27% of Americans who have between $10,000 and $50,000 saved. Additionally, 15% have between $50,000 and $100,000 saved, and 9% have $100,00 to $200,000.

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Few Americans have saved more than $200,000: 4% have between $200,000 and $350,000, 4% more have $350,001 to $500,000 and a little more than 5% have more than $500,000.

People ages 65 and above are more prepared for retirement than the younger generations, as the GOBankingRates survey found that more than 12% of Americans over 65 have more than $750,000 saved for retirement. This percentage stands apart from the rest of the population; among ages 35 to 64, a total of about 13% have this much saved.

Additionally, women make up a higher percentage of Americans who have less than $10,000: 40% of female respondents fall into this range, while 31% of men do.

Here’s How Much You Need for Retirement

There are a few helpful guidelines that can help you determine how much money you need to save up in order to retire at the age you want and achieve your retirement goals. According to Fidelity, a great way to make sure you have enough in your retirement savings is to save at least 15% of your pre-tax income each year. The earlier you can start setting aside money for retirement, the lower your yearly savings rate can be.

If you haven’t started saving for retirement yet, it’s not too late. If you start saving at 30, you might want to save 18% annually for retirement; or, if you start saving at 35, you should save 23%, according to Fidelity.

11% of Americans Put 10% to 20% of Their Income Toward Retirement

Ideally, Americans should be putting at least 15% of their income toward retirement annually. In that case, the general population is far from that; according to the GOBankingRates survey, just 11% of Americans are putting between 10% and 20% toward retirement. The majority of the population is setting aside less than 10%, 13% are saving between 1% and 3%, 18% are at 3% to 5%, and 21% are putting between 5% and 10% in their retirement accounts.

Additionally, 18% of respondents said they could not afford to put any of their income toward retirement.

Follow These Age Markers

Another helpful starting point is to strive to put aside at least one times your annual income by age 30. Then, you want to stay on track by saving three times your income by 40, six times by 50 and eight times by 60. This rule is based on the assumption that you save 15% of your income annually from the age of 25 and are planning to retire at 67.

This technique is a helpful way of gauging where you are in your retirement savings and can give you goals that will allow you to maintain your lifestyle in retirement.

77% of Americans Count on Social Security

With the majority of Americans investing under 10% of their income toward retirement, many are planning to supplement their savings with Social Security.

According to our survey, 20% of respondents said they plan to fund all of their retirement with Social Security, 31% are counting on Social Security to cover more than half of their retirement and 26% are counting on the program to cover less than half. Other respondents have less hope for the program, as 23% stated they are not counting on Social Security at all.

Methodology: GOBankingRates surveyed 997 Americans ages 18 and older from across the country between Aug. 9 and Aug. 11, 2022, asking 16 questions: (1) How much money do you currently have saved for retirement?; (2) How much money do you think you’ll need to retire?; (3) Realistically, at what age do you want to be retired?; (4) At what age did you start saving for retirement?; (5) What worries you financially about retirement? (Select all that apply.); (6) Do you plan to work in retirement?; (7) What assets do you have in your retirement portfolio? (Select all that apply.); (8) How has the current inflation impacted your retirement plans?; (9) How much of your retirement do you plan to fund with Social Security?; (10) How do you feel about the future of Social Security when you retire?; (11) What percentage of your salary are you currently investing for retirement?; (12) Are you planning to move after your retirement?; (13) Where is your ideal place to retire?; (14) What government programs do you plan to use for your retirement? (Select all that apply.); (15) Do you have a pension plan?; and (16) How much do you think the average American has saved at the time they retire? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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This article originally appeared on How Do Your Retirement Savings Compare to the Average American’s?