Here’s how much the average American has in retirement savings

If the fear of running out of money in retirement has kept you up at night, you’re certainly not alone. Saving enough for your future and stretching that money over decades are no easy task.

Although you may not be where you want to be right now, your savings may not be as far from the American average as you think. And for many, there’s still plenty of time to turn things around.

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How much has the average American family saved for retirement?

Many workers estimate they’ll need $1 million or more to retire comfortably, though the typical American doesn’t have anywhere near that. The average household retirement account balance in 2022 was just under $334,000, according to the most recent Survey of Consumer Finances.

Before you panic, keep in mind that averages can be deceiving when it comes to finances. That’s mainly because they include the ultra-rich, who probably have tens or even hundreds of millions of dollars stashed away. Looking at average savings — how much the middle household in the data set has — gives a more realistic picture of how American retirement savers are doing.

The average savings was just $87,000 in 2022. There are a few things worth noting here. First, these are household savings, not individual savings. If you’re married, compare your and your spouse’s combined savings to see how you stack up, not each person individually.

Second, it takes into account all types of workers and families. It includes young adults, singles just starting out in the workplace, to those on the cusp of retirement. So while it may be comforting to know that you may not be as far behind the typical American as you thought, that $87,000 figure doesn’t tell you much about how you stack up to others in your moment in life or what you’re about. you actually need to save for retirement.

Focus on what you need

Instead of worrying about how your savings compare to others, work out how much you believe you’ll need to retire and build a plan to get there. Start by considering how much you have in all of your retirement accounts. Don’t forget about accounts you may have had through previous employers.

Next, figure out how much you need to save per month to reach your goal. A retirement calculator can help here. If you expect a 401(k) match from your employer, subtract that from your monthly savings goal to figure out what you need to put aside on your own.

When this number is within reach, your path forward is very simple. Keep working and don’t forget to put money aside every month. Things are more complicated if you are not able to save as much as you would like right now. You will have to make some changes, but you can.

First, you can adjust your retirement plan—perhaps delaying your retirement date by a few months or years. This gives you extra time to save and allows your investments to grow further, while also reducing the length and cost of retirement. But not everyone wants to cut their pension.

You can also look for ways to increase your savings rate now. This could mean cutting back on other expenses, finding a higher-paying job, or starting a side hustle. If you don’t think you can drastically increase your savings, aim to increase your contributions by 1% of your income per year. That’s just $50 more per month for someone making $60,000 a year.

And remember, you’re not doing it alone. You’re hopefully investing your savings, and a lot of the money you’ll live off of in retirement comes from earnings on those investments. Just keep it and check in with yourself once or twice a year to see if you’re on track and if you can identify any new opportunities to increase your savings.

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