If You've Saved This Much for Retirement by Age 50, You're Ahead of the Game

It's absolutely possible to worry too much about how your retirement savings compare to those of your peers.

On the other hand, it's not necessarily an unfruitful exercise... particularly if you're behind, but still have time to catch up. If nothing else, seeing how your number stacks up to others might be just the motivation you need to change how -- and how much -- you save.

If you're 50 years old right now (or in that ballpark), here's how much money your peers have tucked away for retirement.

Where your peers are

401(k)s are obviously not the only vehicle you can use to build your nest egg. For most of the 50-ish crowd, however, workplace 401(k)s make up the lion's share of their savings. To this end, mutual fund company and retirement plan administrator Fidelity reports that, as of the end of the first quarter, the average 401(k) balance for 45- to 49-year-olds participating in its retirement plans was $163,200, and $215,700 for 50- to 54-year-olds.

These numbers jibe with those from rival fund company and retirement plan administrator Vanguard, which reports that as of last year, the 45- to 54-year-olds participating in its 401(k) plans were sitting on accounts averaging $214,991.

The number changes -- albeit not dramatically -- when retirement savings held outside a 401(k) account are included. In the Federal Reserve's most recent (2022) snapshot of U.S. consumers' finances, it finds the typical 45- to 54-year-old has saved $313,220 for retirement. Presumably, most of the difference reflects money held in an ordinary IRA.

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Don't beat yourself up too much if you're nowhere near these numbers, however. Most people aren't. Although they're averages, they've been skewed higher by a small number of very large account balances. Vanguard adds that the median account value of 45- to 54-year-old participants in its 401(k) plans is a measurably lower $78,730. That just means half of all these customers have more than this amount saved for retirement, while half have less.

In this same vein, the Federal Reserve's 2022 survey indicates that the average median retirement savings for the nation's 45-to-54 crowd is a similarly lower $115,700. Again, much of this difference likely reflects savings in retirement accounts other than a 401(k).

Simply making a clear plan is half the battle

Don't worry too much about where you stand compared to these numbers. You may end up needing less than you think. Conversely, it's possible that those with the very most saved up for retirement still won't have enough money when the time comes.

The key is creating a savings plan that works for you now, and a spending plan that will work for you then. Most people don't, which is a mistake in and of itself. Putting things in writing dramatically increases the chance of doing them simply because it forces you to map out exactly what you need to do to reach your goal.

Of course, simply having a specific savings goal also improves your long-term returns.

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