Understanding the median retirement savings by age is only the first step in planning for retirement. An analysis by the federal government found that Americans' average retirement savings is likely to be insufficient — and many people have no retirement savings at all.
According to this governmental report, the median retirement savings by age for Americans is:
The above savings amounts may seem impressive but consider this "rule of thumb" given by some financial experts on how much individuals should be saving for a goal of retiring by age 67:
That means, for example, that a 35-year-old making $45,000 a year should have $90,000 in retirement savings—twice what most have saved. The statistics are worse for many older earners.
Some experts will cite the "80 percent rule" of retirement planning, which states that you should plan to live on 80 percent of your pre-retirement income.
Your personal goals — retiring early, owning a second home, leaving a nest-egg for your heirs, or accommodating health challenges — could mean that your needs require different planning. The unpredictability of economic factors, medical costs and your longevity will also affect your expenses in retirement.
Many financial advisors suggest saving 10-15 percent of your gross income, starting in your 20s. That's in addition to money set aside for short-term goals such as a new car or emergencies.
Online retirement calculators can also help you determine if you're on track to meet your financial needs in retirement.
Even if you are in your 20s, planning for a comfortable retirement starts with taking a look at your income and expenses and finding ways to save more money. Do you understand how to make the most of your savings?
Depositing into your employer's 401(k) plan or an Individual Retirement Account (IRA) can turn your savings into a reliable source of income in retirement. Many retirement savings plans also reduce your taxable income, so you'll keep more of what you earn today.
Be sure to consult your tax or financial advisor before contributing to an IRA.
Synchrony Bank offers a range of financial products, including IRAs, that feature competitive rates+ plus award-winning customer service, easy online access and the security of Bankrate.com's prestigious 5-Star Safe & Sound® Rating1. Call 1-844-345-5789 today to learn about Synchrony Bank's savings products to prepare for your retirement.
Average Retirement Savings Guide: www.averageretirementsavingsguide.com/#need
CNN Money: http://money.cnn.com/calculator/retirement/retirement-need/
CNN Money: http://money.cnn.com/retirement/guide/basics_basics.moneymag/index7.htm
+National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. High Yield Savings Rates: Average APYs are based on High Yield Savings Accounts of $10,000. Money Market Account Rates: Average APYs are based on Money Market Accounts of $10,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.
1Synchrony Bank achieved a five-star rating for 1st Quarter 2014 through 4th Quarter 2015.
*ANNUAL PERCENTAGE YIELD (APY): All APYs are accurate as of .
APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. For Money Market and High Yield Savings Accounts, the rate may change after the account is opened. For CDs, a minimum of $2,000 is required to open a CD and must be deposited in a single transaction. A penalty may be imposed for early withdrawals. After maturity, if you choose to roll over your CD, you will earn the base rate of interest in effect at that time. The APY shown for CDs and IRA CDs is for a 60-month CD with a balance of at least $25,000. Click here for all CD rates and terms offered.