We usually read a lot about the importance of saving for retirement, but there’s little information about the average saving amount to see if we are on the right track.
When we say it is important to start saving as early as you can, we say it because if you start at an early age, you have more time to put compound interest to work. As you grow, you will have more saving power but less time to put compound interest to work. So even if you start with a little money, you’ll be on your way to build your retirement savings.
Here’s the average Americans save in each stage of life:
On your 20s
The average saving is $16,000. During this stage, most people are paying student loans and building a professional career. The best plan during your 20s is to focus on eliminating your debt and increasing your income. It is also a great stage to learn new things, take courses and develop skills that will make you stand out when it comes to job search.
On your 30s
The average saving is $45,000. At this stage, you probably no longer have an entry level job, so you have more saving power. But keep in mind you probably have more obligations too: marriage, kids, and mortgage. Make a financial plan to keep your finances balanced.
On your 40s
The average saving is $63,000. At this stage, you are probably at the prime of your career. Financial experts recommend that at this stage you have saved at least 2 to 4 salaries.
On your 50s
The average saving is $115,000. Retirement gets closer, but you still have to time to save. It is the perfect time to max out your retirement accounts as this is probably the peak of your saving power.
On your 60s
The average is $172,000. If you are falling behind, you’ll depend primarily on Social Security benefits that are around $1,400 per month. Max out all your retirement options as much as possible before you retire.
Now you know, on average, what’s the ideal amount of money you should have saved by the end of each stage. The good thing is that if you are not there, you can adjust your plan to get as close as you can to these numbers.