It’s never too early to practice financial discipline. Stashing some money aside in your savings is a smart move that encourages financial independence, eliminates stress around money, and avoids debt. Also, saving money allows you to have an easier time reaching certain financial milestones, such as buying a car or house.
Having extra cash also means you have the resources to deal with the inevitable unforeseen events that life often gives us. Medical emergencies, job loss, and relocation are some of the things that can throw you off, leaving you in dire straits financially, if you don’t have the savings put aside to weather the storm. Learn more about the average amount Americans have in savings.
Experts recommend that you save at least 10 to 20% of your monthly income. But what really is the benchmark for the average amount actually saved by age? There’s no clear-cut figure, given that a lot of variables come into play. However, based on our survey, the average amount of money saved is between $11,200 and $60,400, with this range covering the below 35 age group right through to the over 65 one.
Average Savings For People Aged 35 And Below
If you’re aged 35 and below, your peers have saved an average amount of at least $11,200. We’ll quickly point out that recent trends show the average savings tend to be lower among the younger demographic.
As you can see, this age group is pretty extensive and covers those who’ve just received their college degree, up to young professionals who may have well over a decade of work experience. As such, it’s a bit tough to zero down the expected savings based on each age.
Given the caliber of people that fall within this age group, college graduates may still be paying off student loans. Young professionals may be in a phase where they are starting families and buying homes. It follows that a large chunk of their income will go to rentals, mortgage repayments, and often both car and student loans.
So it makes sense why their savings might be on the low side. If the figure seems too steep, a good goal to start with is to aim to have three to six months of expenses stashed away in an emergency account. Even this small amount of financial cushioning can be a big lifesaver.
Average Savings For People Aged 35-54
This age group covers the bulk of the earning population in America. To make a better comparison, we’ll further split the age group in two—starting with the 35-44. People in this age group are well into adulthood and have approximately $27,900 in savings. At this point in your life, you should be proactive enough to have money saved to cover things like an accident or unexpected job loss.
Also, as the more financially savvy demographic, this age group should be looking to diversify their financial portfolio. Consider investing in real estate and the stock market. Plus, this is the perfect age group to start setting aside funds for your retirement.
The second group is the 45-54 age group. The average amount of money saved by this demographic is $48,200. Financial experts recommend that by age 50, you should have at least six times your annual salary in savings if you expect to retire by 67.
The Average Amount Saved By People Aged 55 And Older
Again, for comparison purposes we’ll split this age group into three, starting with the 55 to 64 age group. A survey showed that people in this age range have an average of $57,800 saved. At this age, retirement is literally a few years away, which is why people should be looking to step up their savings efforts.
For people aged 65 to 75, stats revealed they have an average savings balance of $60,400. As you can imagine, this is now the retirement age for most Americans.
Savings tend to dip for people aged 75 and older, going down to $55,600. The logical explanation for this is that the demographic is now living off their savings and may not have any income coming in. That’s why you must have a retirement budget and stick to it, otherwise you can find yourself in a terrible financial situation at the end of your life with little energy left to fix it.
Conclusion
Now that you know the average amount of money saved by your peers, are you on the right track? Trends show that average balances tend to increase as people grow older based on several variables.
But whatever the case, saving money is extremely important regardless of your age. It’s never too early to start saving because the money will come in handy should you wish to make large purchases, take a holiday, or suddenly need to cover an unexpected large expense.
Always keep in mind that saving is your first step to attaining financial freedom and making provisions for your retirement. So start today, even if it’s just with the smallest amounts.
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