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How Does Your Retirement Compare To Your Neighbors’?

How Does Your Retirement Compare To Your Neighbors’?

| May 27, 2021
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Rather than being the end of a career, retirement is the beginning of life’s next chapter. This season can span decades and require sizable assets to take care of all our needs during these non-working years. If retirement is around the corner, you’re likely trying to figure out how to make the most of your golden years while ensuring you don’t run out of money. With so many factors to consider, pinpointing the exact amount of assets needed can be tricky. And Googling advice online will likely leave you feeling confused and overwhelmed.

For example, we are told that we need X amount for a 20-year retirement, or that we should contribute X amount to our 401(k). It sometimes feels impossible to make sense of all this information and know how to apply it to your own unique situation. Is there a way to figure out if you’re on track?

The Numbers Tell The Story

In the most recent Survey of Consumer Finances (SCF), (1) we get an inside peek at the size of retirement savings accounts across varying age groups. Let’s take a look at the numbers.

The Under-35 Crowd

In families headed by someone under 35 years old, the average household (not individual) retirement savings is $32,500. This may sound like a respectable amount, but the average savings statistic tends to be skewed by outliers (extreme over- or under-achievers). Because of this, the median value is often a more accurate measurement. In this case, the median household savings was just $12,300. Of the families surveyed in this group, only 42% actually have a retirement account.

Between 35-44

In families headed by someone between the ages of 35 and 44 years old, 57% have a retirement account, the average household savings is $100,100, and the median household savings is $37,000. People in this age group tend to have higher incomes, but also higher expenses. Many find it difficult to save as much as they should, especially those with kids.

Late 40s To Early 50s

In the 45-to-54-year-old category, incomes are still high and we tend to see a jump in savings. In this group, 60% have a retirement account, the average household savings is $215,000, and the median household savings is $82,600.

Pre-Retirees

Those nearing retirement, aged 55 to 64, don’t seem to be all that ready for their upcoming milestone. According to the SCF, the average household retirement savings in this group is $374,000, with a median of $120,000.

Those Who’ve Reached The Golden Years

The last group, aged 65 to 74, includes many who have already entered retirement and are thus spending more than they’re saving. In this group, about 50% report having a retirement account, the average household savings is $358,400, and the median is $126,000.

What’s The Benchmark?

So now that we know what the average person has saved, is it enough? Let’s take a look at how these figures compare to retirement savings milestones recommended by financial experts. According to Fidelity Investments, you can gauge your progress by comparing your retirement savings to your annual salary. (2) They suggest you aim for your retirement savings to be:

  •     1x the amount of your salary by age 30
  •     3x the amount of your salary by age 40
  •     6x the amount of your salary by age 50
  •     8x the amount of your salary by age 60
  •     10x the amount of your salary by age 67

What Do I Do Now?

Some people may look at their current retirement figures and give themselves a pat on the back. Others of you may be biting your nails wondering why you’ve never seen these figures before. Nevertheless, the fact of the matter is that you won’t be living the same retirement as your peers. You need to figure out how your savings compares to the cost of the retirement you desire. There are a plethora of online retirement calculators, but they are often very generic and fail to take into account the various vital factors that will impact your unique personal situation.  

The only way to truly get a clear idea of what you’ll need to retire comfortably is to have a wealth manager run a thorough analysis. A professional can utilize their expertise as well as modern technology to more accurately show you different possible retirement outcomes and how to prepare for both the good and the bad.

We Can Help

Your situation isn’t cookie-cutter, so cookie-cutter solutions won’t work. We at Bridgerland Financial are dedicated to professionally supporting, educating, and providing informed and tailored direction to each and every client. We can personalize and simplify your finances and get you on track toward your ideal retirement. 

Are you tired of feeling like you’re falling behind or wondering if you will have enough money to retire? Wait no longer. Schedule an appointment online or reach out to us at david.packer@bridgetoretire.com or (435) 535-1630. We look forward to hearing from you!

About David

David Packer is founder and financial advisor at Bridgerland Financial, an independently managed financial firm in Utah. With 20 years of industry experience, David serves his clients by helping them bridge the gap between their working years and their retirement. He provides tailored, comprehensive financial plans to his business owner and individual clients so they can retire with confidence. David has a bachelor’s degree in finance and holds the Chartered Retirement Planning Counselor℠ (CRPC®) credential. Outside of the office, David loves to spend time with his wife and five kids and stay involved in his community. He currently serves on the board of directors of the Cache Valley Chamber of Commerce. He and his wife, Melonie, spent years as foster parents and eventually adopted their foster children. David loves playing and watching all kinds of sports, including officiating high school sports, and won’t turn down a good board or card game. Learn more about David by connecting with him on LinkedIn. You can also register for his recent webinar, What We Do & How We Help here.

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(1) https://www.federalreserve.gov/econres/scfindex.htm

(2) https://www.fidelity.com/viewpoints/retirement/how-much-money-do-i-need-to-retire 

*Retirement savings factors are hypothetical illustrations, do not reflect actual investments, results, or actual lifetime income and are not guarantees of future results. Targets do not take into consideration the specific situation of any particular user, the composition of any particular account, or any particular investment or investment strategy. Individual users may need to save more or less than the savings target displayed depending on their inputs of retirement age, life expectancy, market conditions, desired retirement lifestyle, and other factors.

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