Age 45-54? Here's the Average Retirement Savings for People Your Age

Source The Motley Fool

Key Points

  • A small number of very large accounts skew the average.

  • If your savings exceed these averages, you’re likely ahead of many of your peers.

  • Being below average doesn’t guarantee trouble -- other factors matter too.

  • The $23,760 Social Security bonus most retirees completely overlook ›

It's no surprise that people ages 45 to 54 tend to have substantially more retirement savings than younger workers. After all, they've spent more years in the workforce. Still, balances vary widely, and some still lag.

Given the number of financial issues retirees face -- from healthcare expenses to emergencies -- it's fair to say that most people would like to be better prepared for retirement than they are.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

People sitting at their kitchen island, reviewing papers.

Image source: Getty Images.

The average

To get a clearer sense of where 45-to-54-year-olds stand, it may help to break the age group down further. According to Fidelity Investments, 45-to-49-year-olds have an average 401(k) balance of $163,200, while 50-to-54-year-olds have an average balance of $215,700. While these figures cover 401(k) savings only and don't include IRAs, pensions, or other assets, they're a snapshot of how people invest through their employer-sponsored retirement plans.

Extremely high and low values can skew averages. In addition to 45-to-54-year-olds who don't have much saved, these statistics also include people who've maxed out their retirement accounts for years.

Improve your situation

According to the Federal Reserve, roughly 62% of households in the 45-to-54 age bracket have a retirement account, leaving 38% without retirement savings. Whether you're among the 38% with no retirement account or haven't saved enough to feel comfortable, here's a sample of steps you can take to improve your situation:

  • Gradually raise contributions to your workplace plan: Increase contributions to your 401(k), SIMPLE IRA, or other employer-sponsored plan by 1% annually until you reach your target. At the very least, contribute enough to receive any match offered by your employer.
  • Take advantage of catch-up contributions: Catch-up contributions are limited to those 50 and over, but they can turbocharge your retirement plan. Depending on the plan, you can add anywhere from $1,100 to $11,250 to your account on top of your plan's contribution limit.
  • Invest "extra" money: If you receive a raise, bonus, commission, tax refund, or even an inheritance, contribute a portion rather than spending it all.
  • Look at self-employed plans: If you own a business, you may be surprised by how easy it is to set up a solo 401(k) or SEP-IRA. Both allow for substantial employer contributions (in this case, the "employer" is you).
  • Use a smart investment strategy: Rather than taking extreme risks to catch up, invest in diversified, low-cost holdings that fit your timeline.

If you haven't been able to keep up with retirement account contributions, don't be discouraged. Instead, create a plan that lets you build it up a little at a time.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Weekly Market Outlook: U.S. October CPI Focus and Powell and Fed Officials SpeakInsights – This week, the U.S. will release October CPI data, with inflation expected to face challenges in easing further. Retail sales data will also be closely watched for insights into the economy, guiding the Fed's future policy.
Author  Mitrade
Nov 11, 2024
Insights – This week, the U.S. will release October CPI data, with inflation expected to face challenges in easing further. Retail sales data will also be closely watched for insights into the economy, guiding the Fed's future policy.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Silver price forecast: XAG/USD rises to near $61.40 as US yields retreat, NFP eyedSilver price (XAG/USD) is up 0.55% to near $61.38 during the late Asian trading session on Friday. The white metal edges up as rally in United States (US) Treasury Yields has hit a pause.
Author  FXStreet
Oct 02, Fri
Silver price (XAG/USD) is up 0.55% to near $61.38 during the late Asian trading session on Friday. The white metal edges up as rally in United States (US) Treasury Yields has hit a pause.
placeholder
WTI Price Forecast: Hangs near four-week low, around $89.00 as bears seem noncommittalWest Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts sellers for the second straight day on Monday and sticks to its intraday losses around the $89.00 mark through the early European session.
Author  FXStreet
22 hours ago
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – attracts sellers for the second straight day on Monday and sticks to its intraday losses around the $89.00 mark through the early European session.
placeholder
Gold holds steady below $4,150 amid elevated US yields Gold price (XAU/USD) trades on a flat note near $4,140 during the early Asian session on Tuesday. Pressure from a stronger US Dollar (USD) and elevated US Treasury yields was offset by reduced expectations of a Federal Reserve (Fed) rate hike this month.
Author  FXStreet
5 hours ago
Gold price (XAU/USD) trades on a flat note near $4,140 during the early Asian session on Tuesday. Pressure from a stronger US Dollar (USD) and elevated US Treasury yields was offset by reduced expectations of a Federal Reserve (Fed) rate hike this month.
goTop
quote