What’s the Average Retirement Savings by Age 55?

How Much Have Americans Saved for Retirement by Age 55?
It can be hard to know if you're saving enough to ensure a comfortable retirement. A 2015 analysis by the federal government found that average Americans approaching retirement (ages 55-64) have saved around $104,000. 

But some individuals have saved much more and others have no retirement savings at all. The same study was updated to 2016 data, which found that 29% of households age 55 and older don’t have retirement savings or a defined benefit (DB) plan.  

With pensions and Social Security providing less financial security than in the past—coupled with an uncertain economic future—the pressure is on for working Americans to save as much as they can for retirement.

How Much Money Will You Need?
In order to estimate what you need to put away for retirement, ask yourself the following questions:

• At what age do you plan to retire? The average American retires between ages 62 and 65, but age isn’t the only factor in determining the right time to retire.
• How much debt will you pay off before retirement? What you have left to pay on your mortgage or other areas of debt and how you can reduce your debt in retirement affects how much money you will need.
• What is the cost of living where you plan to retire? Are you planning to move once you retire? Is the cost of living in your current city changing?
• What kind of lifestyle do you want to lead? For example, is travel a goal? Knowing how much you’ll need in reserves to live the lifestyle you’re seeking in retirement can help you determine a savings goal.
• Do you want to leave money to family members? If so, you may either need to save more or live off less during retirement.

Some experts suggest planning to live on a minimum of 65 to 75% of your current income in retirement. According to these parameters, you may need 10 to 12 times your current annual salary saved by the time you retire. Experts say to have at least seven times your salary saved at age 55. That means if you make $55,000 a year, you should have at least $385,000 saved for retirement. 

Keep in mind that life is unpredictable–economic factors, medical care, how long you live will also impact your retirement expenses. So it’s advisable to give yourself a cushion and exceed the average retirement savings.

How Much Should You Save Now?
Many financial advisors recommend saving a minimum of 10% of your annual gross income toward retirement at any age. These savings are in addition to money that you may be setting aside for short-term goals, such as a new car, or emergencies like medical bills.

It’s never too early to start saving for retirement. There are practical, smart steps you can take toward meeting the recommended retirement savings at any age:

Learn How to Be Financially Smart in Your 20s
Recommended retirement savings: Up to 1x your annual salary

How to save: People in this age group can contribute to their company-provided 401(k), chip away at their student loans and open other retirement plans like IRAs.

Begin to Make Savings

Progress in Your 30s 
Recommended retirement savings: 1-2x your annual salary

How to save: Even though you may have more expenses than you did in your 20s—from buying a house, having a family or continuing to pay off student loans—don’t forget about saving for retirement. Take full advantage of your company’s 401(k) match and contribute on your own, as well. 

Think About Retirement in Your 40s
Recommended retirement savings: 3-4x your annual salary

How to save: Retirement may still seem far away, but getting serious about saving for retirement can lay a solid foundation for your nest egg. Increase your contributions to your retirement plans and tighten up on your budget if needed.

Focus on Retirement Savings in Your 50s
Recommended retirement savings: 6-8x your annual salary

How to save: In your final decade before retirement, prioritize meeting your retirement savings goals. Talking to a financial advisor may help.