What the Typical Retirement Saver Over 70 Actually Has Stashed Away

How do I compare? That's a question that humans ask all of the time, but also one that can lead to bad emotional outcomes if you aren't careful. When it comes to money, there will always be someone who has more than you. But at the same time, it is valuable to set benchmarks, noting that the average U.S. saver aged 65 to 74 (70 being the rough midpoint) has around $600,000. That's the peak savings age group, according to the U.S. Federal Reserve.

But the retirement savings math isn't that simple. Here's a deeper examination of that number and another way to look at savings goals that is probably a better option.

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Is it $600k or $200k?

It is entirely true that the average savings of a 65 to 74-year-old is around $600,000. That this is also the peak age group for savings also makes sense, given that most people retire sometime after 60. But the average, or the mean, isn't exactly the best figure to consider here. That's because it includes people at the extremes that can distort the result. Think of it this way: if you put Elon Musk in a room with 10 people who have saved no money at all, the average would still be in the billions. This is why the median is often a more telling figure, with half of the sample above the median and half below.

The median savings for people aged 65 to 74 is only $200,000. That's actually a troubling figure, since retiring on $200,000 isn't likely to be easy. However, what the massive divide between the mean and the median highlights is that saving is a very individual experience. Which is why most savers should probably consider their savings situation differently.

A rule of thumb to help you keep on track

You save money by not spending all of your income. So income is a key factor to consider in your savings plans. Which is why a quick rule of thumb is to have saved around 10x your salary by age 67. Leading up to that figure, you get 1x by 30, 2x by 35, 3x by 40, 4x by 45, 6x by 50, 7x by 55, and 8x by 60.

The goal using this rule of thumb isn't an arbitrary number; it is a personal one. And that can make a huge difference in staying motivated as you plan for your retirement. If you are looking at the $600k average and thinking it's out of reach, step back and reconsider what that number really represents. The $200k mean figure is more telling, but it may still not be the right one to target because it isn't specific to your situation. You're likely to be better off targeting 10x your salary by age 67, whatever number that happens to be.

In other words, don't focus too much on what everyone else is doing. You need to save enough for your situation, not the average situation.

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