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What's the average retirement savings by age and are you on track?

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For some of us, retirement may seem too far away to even think about, as may the idea of ensuring we’re saving the right amount year after year. But, as with any type of saving, the sooner you’re able to start, the better. 

Here’s one way to stay on track for retirement—dream of all the places you want to travel while squirreling away the most money you can into your 401(k). “Morocco, Portugal, South Africa, Australia, New Zealand are all on the list,” said Rachel G., 46, a business analyst who lives in Rochester, NY. Her goal is to save $1 million in her retirement fund by the time she’s 60.

“I've worked for the same company for 24 years and started contributing to my 401(k) right away,” she said. “Over the years, as I could afford it, I've increased my contributions until they hit the pre-tax contribution limit set by the IRS.”

Rachel, a Gen X saver, is the gold standard. She’s someone who tackled retirement early and often and who will be reaping the rewards of her retirement long before employees a decade her junior are even close to retiring. She’s already nearly halfway to her goal already, and well ahead of the curve set by industry standards.

So, what about the rest of us who are not even 40, or perhaps haven’t even started?

What's the average retirement savings by age?

Most Americans are not on track for a smooth-sailing retirement. According to CNBC, the median 401(k) balance in America is just $35,345 as of 2022.

That’s a far cry from the guidelines suggested by retirement experts. For example, according to T. Rowe Price, employees should aim to have a certain multiplication of their salary set aside for retirement.

  • Age 30: half of salary saved today

  • Age 40: 1.5x to 2.5x salary saved today

  • Age 50: 3x to 6x salary saved today

  • Age 60: 5.5x to 11x salary saved today

  • Age 65: 7x to 13.5x salary saved today

A recent Varo survey1 showed that 55% of people don’t even have $500 ready to tap in an emergency—and that percentage jumps to 61% when just considering millennials. In the same survey, only 4 in 10 people of all ages said they even had access to an employer-sponsored retirement plan and 45% didn’t have a savings account.

Instead, Americans are relying on pension benefits and Social Security, which experts say is a risky move, as both programs are in decline. “The retirement system does not work for most workers,” writes Monique Morrissey, author of The State of American Retirement. “We can assume that as the value of employer-based retirement plans is declining and retirement savings are growing more unequal, retirement security is declining and growing more unequal.”

It’s never too early or late to start saving for retirement

The good news? It’s never too early, or too late, to start planning. And you can start a nice nest egg by building up just $10,000 in your 401(k) or other retirement investment account.

Part of your success in doing so relies on  developing a saver’s mindset and taking advantage of retirement savings accounts, as well as other financial tools and services like high-yield savings accounts, automatic savings tools, and accounts with no hidden fees.

“We go to high school and college and nobody teaches us about personal finance,” said Trent Bryson, a certified financial planner and CEO of Bryson Financial in Long Beach, California. “Something that’s important is just starting to begin the dialogue. So for us, with retirement planning, it’s starting to ask what that really looks like for people.”

“For workers in their 20s, 30s, and 40s, that means also looking at their parents’ and grandparents’ lifestyles,” he said. “They are saying ‘I like that’ or ‘I don’t like that’ and trying to figure out what their best course is.”

Why retirement saving is harder for millennials

Whatever your parents tell you, your experience is not going to be like theirs. Retirement planning and retirement itself has changed significantly in the last few decades. The traditional corporate ladder has been replaced by a patchwork of multiple jobs and side hustles.

The student loan crisis has also meant that the money that past generations may have put toward retirement is now going to pay off tens of thousands of dollars in education debt.

“The population is also living longer,” said Bryson, “which means more money is needed for medical costs and, possibly, long-term care facilities or in-home care.”

So what can you do?

How to successfully save for your retirement

Even though it may feel daunting—and the headwinds against your progress may feel strong—saving up for later in life is still important to do. Here’s where to start.

  1. Save just even a little every paycheck.

  2. Use your employer-sponsored retirement plan if you have one.

  3. If you don’t have access to a retirement plan or find it’s too much to think about, start saving with a high-yield


    savings account


Bryson recommends everyone start by saving that $10,000 into a retirement account, preferably by age 30 if at all possible. Even if you don’t contribute another cent and you invest wisely with a 10% growth, he said, you could double your nest egg every 7 years.

That same $10,000 you invested at age 30 would be worth a whopping $640,000 by the time you retire at age 72, he said. “The people that have been the most successful are those that put their money to work for them instead of them working for their money. It’s like night and day in terms of their lifestyles.”

Bryson said he’s always stunned how many people fail to take advantage of a 401(k), either through their employer or a self-funded account.  “All too often there’s the ‘I’m going to keep it in my bank account’ mentality,” he said. “By just letting it sit on the sidelines, it doesn’t grow. You have to take advantage of the growth.”

And if you have an employer that’s offering a matching 401(k), take them up on it from the very first day. Remember, you always have the right to the money in your 401(k) even if you move employers.

“It’s insane how many people don’t take advantage of that. They think, ‘That’s so far away, I’m going to pay off my school loans or I’m going to save for a house,’” he said, adding that the number one excuse he hears is, “I don’t know how long I’m going to be here.”

“But whether they’re going to be there a short time or a long time it doesn’t hurt to put money away,” he said. “Nobody else is planning for your retirement.”

Our intention here is not to scare you into saving, nor should you feel like it’s an impossible feat to manage if you haven’t started yet. As we said before, it’s never too early or too late to start saving for retirement. By even taking the very first steps you need to (especially the ones that are currently the most manageable), you can gradually get in better financial shape for the future than you were before.  

1 December 2018 survey for Varo conducted by Qualtrics of 1,200 U.S. consumers between the ages of 18 and 75

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.


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