What’s your Nest Egg like? Here’s what it takes to be in the top 10% of savers in retirement
Let’s talk about its nest egg. No, not in “Why didn’t you save more?” way – this is not a fault. Instead, think of this as a friend request. Regardless of whether your savings are growing or just getting started, it’s natural to ask: How do you measure it? And for those of you watching the first 10% of savers in retirementthese numbers will show you exactly what is needed.
Spoiler: It’s not all doom and gloom; there is always time for moves. Let’s break it down.
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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, things look like this:
Under 35 years:
• Average savings: $49,130
• Average savings: $18,880
Age 35-44:
• Average savings: $141,520
• Average savings: $45,000
Age 45-54:
• Average savings: $313,220
• Average savings: $115,000
Age 55-64:
• Average savings: $537,560
• Average savings: $185,000
Age 65-74:
• Average savings: $609,230
• Average savings: $200,000
75 and older:
• Average savings: $462,410
• Average savings: $130,000
If you beat these averages, that’s worth celebrating! But maybe you’re looking at the next level – join the top 10%. What does that look like?
The top 10% of savers in retirement are in a league of their own. Here’s what it takes to join their ranks:
Average savings: about $900,000.
Average savings: About $1.3 million.
It’s important to mention that the average is higher because a few ultra-wealthy savers skew the numbers, while the median shows what most people have.
By age 50, the top 10% of savers often have more than $500,000 stashed away.
By age 55, they typically approach $750,000 or more.
And the crème de la crème? The the top 1% have savings of $2.3 million. But when the broader definition of retirement assets is considered, the number rises to $5 million, according to DQYDJ, using Federal Reserve statistics.
What should you strive for?
Even if the first 10% seems far away, financial experts offer benchmarks to keep you on track for a comfortable retirement:
• 30 years: Save 1x your annual salary.
• 40 years: 3 times your salary.
• 50 years: 6 times your salary.
• 60 years: 8 times your salary.
• Age 67: 10 times 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 seem a little insufficient, don’t worry. There are many ways to catch up:
1. Maximize Retirement Contributions: Contribute as much as possible to your 401(k) or IRA. And if your employer offers a match, grab that free money!
2. Start saving early: The earlier you start, the more compound interest benefits you. If you’re late to the game, don’t worry—you can still make it up.
3. Take advantage of catch-up contributions: For those over 50, you can put away an extra $7,500 a year in your 401(k). Starting in 2025, people ages 60 to 63 can save up to $11,250.
4. Cut unnecessary expenses: Redirect what you save into your retirement fund. Small sacrifices now later they can lead to big gains.
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 a move
If you’re behind, don’t panic – it’s never too late to start. Whether you’re playing catch-up in your 50s or just starting out in your 20s, every little bit counts. The key is to be consistent and make smart financial decisions now to give your future a head start.
So what does your nest look like? If you are already ahead of the average, you are in a good place. And if not, now is the perfect time to do so build a plan and take control of your financial future. Remember, retirement saving isn’t perfection – it’s progress.
*This information is not financial advice and personalized guidance from a financial advisor is recommended for making well-informed decisions.
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