AUTHOR BIO
Mike Ballew is the founder of Eggstack®. He’s a member of the Financial Planning Association, an engineer, and software developer.
TERMS OF USE
ABOUT US
Mike Ballew – Financial Planning Association member, engineer, author, and founder at Eggstack.
Eggstack is an independent financial technology company located in Jacksonville, Florida. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
PRIVACY POLICY
Curious about what others have saved for retirement? Here is the average retirement savings by age:
| AGE | SAVINGS |
|---|---|
| 20s | $16,000 |
| 30s | $45,000 |
| 40s | $63,000 |
| 50s | $117,000 |
| 60s | $172,000 |
We Americans are not great at saving for retirement. We tend to stick our heads in the sand and hope for the best – the government or our employers will take care of everything. The truth is, no one has a more vested interest in your retirement than you do. You need to take an active role in planning your retirement. After all, you’re going to be the one living it.
The best way to save for retirement is with your employer’s retirement plan. You never see the money before it is taken out of your paycheck and most employers match your contributions. If you choose a traditional pre-tax plan, you pay no taxes on your contributions. If you go with a Roth account, you pay taxes now but none when you retire.
The worst way to save for retirement is not to save at all. Sadly, this is the case for 25% of Americans. Retirement will be a bleak existence living off Social Security or being a financial burden to their families.
Ideally you determine how much to save based on your age, lifestyle, income, and Social Security benefits. To get started, aim for 10-15% of your gross income. If that is too big a lift, start with whatever you can afford and increase it by 1% each year.
While it is interesting to see what others have saved for retirement, the numbers by no means reflect what is needed. Rather, they are an indictment on the average American's inability to save for retirement. You don’t need a spreadsheet or a financial advisor to see that you cannot retire on $172,000. Median income is $70,000 and the average retirement lasts 20 years. Even with Social Security $172,000 will only last a few years.
A recent survey found that half of participants fear running out of money in retirement. Based on what we've seen here, it appears those fears are well-founded. Most people spend more time planning their next vacation than their retirement. Take a break from the game or social media and give some thought to retirement.
Financial Planning Association member, engineer, author, and founder at Eggstack.
