May 15th | A recent survey by Northwestern Mutual Life Insurance Company, the largest life insurance company in the United States, showed that US$1.46 million is the ideal retirement savings goal, up from US$1.27 million last year.
However, according to data from the Federal Reserve\’s 2022 Survey of Consumer Financial Conditions, Americans\’ median retirement savings is $87,000. Well below the ideal goal of $1.46 million.
The chart below shows what Americans of different ages currently hold in retirement savings.
Overall, the average American has about $334,000 in retirement savings. The median amount saved is about $87,000.
The average retirement savings for people 35 and under is about $49,000. The median amount saved is about $19,000.
As age increases, retirement savings also increase.
The average retirement for people ages 65 to 74 is about $609,000. The median amount saved is about $200,000.
At current rates, this means that with these savings alone, the older generation\’s pension would be only $10,000 per year.
Given this shortfall, Americans will increasingly need to rely on Social Security benefits to make ends meet.
It is estimated that state and federal governments will need $1.4 trillion in public assistance costs by 2040.
One reason for the decline in retirement savings is the sharp decline in employment-supported pension plans over the past few decades.
As of 2022. $37.8 trillion is held in U.S. pension plans and individual retirement accounts (IRAs).
Of these, employer-sponsored plans account for 70% of these assets.
Another survey showed that only 58% of Americans ages 55 to 64 have retirement accounts, underscoring the growing challenge of preparing for retirement.
Graphic | How much do Americans save for retirement?
May 15th | A recent survey by Northwestern Mutual Life Insurance Company, the largest life insurance company in the United States, showed that US$1.46 million is the ideal retirement savings goal, up from US$1.27 million last year
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