How Does Your Nest Egg Stack Up? Here’s What It Takes To Be In The Top 10% Of Retirement Savers
Let’s speak about your nest egg. No, not in a “Why have not you saved more?” way – this is not a guilt trip. As a substitute, consider this as a friendly check-in. Whether your savings are soaring or simply getting off the bottom, it’s natural to wonder: How do I measure up? And for those of you eyeing the top 10% of retirement savers, these numbers will show you exactly what it takes.
Spoiler: It is not all doom and gloom; there’s at all times time to make moves. Let’s break it down.
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The Averages: Are You Ahead or Behind?
First, let us take a look at what the common American has saved for retirement by age group. Based on the 2022 Survey of Consumer Funds, here’s where things stand:
Under 35:
• Average savings: $49,130
• Median savings: $18,880
Ages 35-44:
• Average savings: $141,520
• Median savings: $45,000
Ages 45-54:
• Average savings: $313,220
• Median savings: $115,000
Ages 55-64:
• Average savings: $537,560
• Median savings: $185,000
Ages 65-74:
• Average savings: $609,230
• Median savings: $200,000
75 and older:
• Average savings: $462,410
• Median savings: $130,000
In case you’re beating these averages, that is value celebrating! But perhaps you are eyeing the following level – joining the highest 10%. What does that appear like?
The highest 10% of retirement savers are in a league of their very own. Here’s what it takes to hitch their ranks:
Median savings: Around $900,000.
Average savings: Roughly $1.3 million.
It is vital to say the common is higher because a couple of ultra-wealthy savers skew the numbers, while the median shows what most individuals have.
By age 50, the highest 10% of savers often have over $500,000 tucked away.
By 55, they’re typically closing in on $750,000 or more.
And the crème de la crème? The top 1% boast savings of $2.3 million. But, when considering a broader definition of retirement assets, the number soars to $5 million, in response to data from DQYDJ, using stats from the Federal Reserve.
What Should You Aim For?
Even when the highest 10% feels far off, financial experts offer benchmarks to maintain you heading in the right direction for a cushty 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 aren’t hard rules – life happens. But they’re a very good place to begin to see where you stand.
In case your savings feel slightly underwhelming, don’t stress. There are many ways to catch up:
1. Max out retirement contributions: Contribute as much as possible to your 401(k) or IRA. And in case your employer offers a match, grab that free money!
2. Start saving early: The sooner you begin, the more compound interest works in your favor. In case you’re late to the sport, don’t be concerned – you possibly can still catch up.
3. Reap the benefits of catch-up contributions: For those over 50, you possibly can sock away a further $7,500 annually in your 401(k). Starting in 2025, individuals aged 60-63 can save as much as $11,250.
4. Cut unnecessary expenses: Redirect what you save toward your retirement fund. Small sacrifices now can result in big wins later.
5. Diversify your investments. A mixture of stocks, bonds and other assets can balance risk and grow your nest egg.
It’s Not Too Late to Make Moves
In case you’re behind, don’t panic – it’s never too late to start out. Whether you are playing catch-up in your 50s or simply starting in your 20s, every little bit counts. The bottom line is consistency and making smart financial selections now to provide your future self a leg up.
So, how does your nest egg stack up? In case you’re already ahead of the averages, you are in a fantastic spot. And if not, now’s the proper time to construct a plan and take control of your financial future. Remember, retirement savings aren’t about perfection – they’re about progress.
*This information just isn’t financial advice and personalized guidance from a financial adviser is beneficial for making well-informed decisions.
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