How Does Your Nest Egg Stack Up? Here's What It Takes To Be In The Top 10% Of Retirement Savers
Let's talk about the egg of your nest. No, not in a “Why haven't you saved more?” way – this is not a guilt trip. Instead, think of this as a friendly check-in. Whether your savings are skyrocketing or just starting to emerge, it's natural to wonder: How do we measure up? And for those of you eyeing the Top 10% of retirement saversthese numbers will show you exactly what is needed.
Spoiler: It's not all doom and gloom; there is always time to make moves. Let's break it down.
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The Averages: Are You Ahead or Behind?
First, let's look at what the average American has saved for retirement by age group. According to the 2022 Survey of Consumer Finances, here's where things stand:
Under 35:
• Average savings: $49,130
• Median savings: $18,880
35-44 years:
• Average savings: $141,520
• Median savings: $45,000
45-54 years:
• Average savings: $313,220
• Median savings: $115,000
55-64 years:
• Average savings: $537,560
• Median savings: $185,000
65-74 years:
• Average savings: $609,230
• Median savings: $200,000
75 and over:
• Average savings: $462,410
• Median savings: $130,000
If you beat these averages, that's worth celebrating! But you may be eyeing the next level – joining the top 10%. What does that look like?
The top 10% of retirement savers are in a league of their own. Here's what it takes to join their ranks:
Median savings: About $900,000.
Average savings: About $1.3 million.
It's important to note that the average is higher because a few ultra-rich savers skew the numbers, while the median shows what most people have.
By age 50, the top 10% of savers often have over $500,000 tucked away.
By 55, they typically close in on $750,000 or more.
And the crème de la crème? Tea The top 1% have savings of $2.3 million. But, when considering a broader definition of retirement assets, the number rises as high as $5 million, according to data from DQYDJ, using statistics from the Federal Reserve.
What Should You Aim For?
Even if the top 10% feels a long way off, financial experts offer benchmarks to keep you on track for a comfortable retirement:
• Age 30: Save 1x your annual salary.
• Age 40: 3x your salary.
• Age 50: 6x your salary.
• Age 60: 8x your salary.
• Age 67: 10x your salary.
These milestones are not hard and fast rules – life happens. But they are a good starting point to see where you stand.
If your savings are feeling a little overwhelming, don't stress. There are many ways to catch up:
1. Maximum retirement contributions: Contribute as much as possible to your 401(k) or IRA. And if your employer offers a matching match, grab that free money!
2. Start saving early: The earlier you start, the more compound interest works in your favor. If you're late to the game, don't worry – you can still catch up.
3. Take advantage of catch-up contributions: For those over 50, you can keep an extra $7,500 annually in your 401(k). Starting in 2025, individuals aged 60-63 can save up to $11,250.
4. Cut unnecessary expenses: Redirect what you save towards your retirement fund. Small sacrifices now can lead to big wins later.
5. Diversify your investments. A mix of stocks, bonds and other assets can balance risk and grow your nest egg.
It's Not Too Late to Make Moves
If you're behind, don't worry – it's never too late to start. Whether you're playing catch-up in your 50s or starting in your 20s, every little bit counts. The key is consistency and making smart financial choices now to boost your future self.
So, how does your nest egg accumulate? If you're already ahead of the averages, you're in a great place. And if not, now is the perfect time to build a plan and take control of your financial future. Remember, retirement savings aren't about perfection – they're about progress.
*This information is not financial advice and personal guidance from a financial adviser is recommended for making informed decisions.
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