For many Americans, retiring can feel pointless. If you put all of your savings information into the fixed-income calculator and realize your nest egg is coming up short, it may cause you to delay retiring or forgetting about the idea altogether.
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The reasons for this retirement wall can vary, but the most common issue for the middle class is never having or prioritizing an individual retirement account or investment fund. But is the middle class actually falling behind in retirement? Or, as the economic class title would suggest, are they somewhere in the middle?
According to the Pew Research Center, middle-class income in 2025 is estimated to range from $52,000 to $160,000 annually. That’s a wide range, meaning the amount allocated toward covering retirement can also vary widely from person to person.
So, how much does the average middle-class person have in their savings? GOBankingRates has found the answer to this question, and a few more you may have about retirement funds.
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Understanding Average and Median Retirement Savings by Age
The average retirement savings for all families is about $333,940. However, this figure can be misleading due to the presence of outliers. A more telling statistic is the median retirement savings, which stands at $87,000. The median offers a clearer picture of what a typical family has saved, excluding the extremes on both sides that can skew the average.
Here is a breakdown of the average and median retirement savings by age group.
Under 35
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Average Savings: $49,130
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Median Savings: $18,880
Young adults are often balancing the challenges of student debt, early career earnings, and establishing financial independence. As a result, their retirement savings are typically lower, with nearly half of families in this age group having some form of retirement account.
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Ages 35-44
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Average Savings: $141,520
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Median Savings: $45,000
This age group sees a significant increase in retirement savings as individuals move into higher-paying positions and become more focused on their financial futures. About 60% of households in this bracket have retirement accounts.
Ages 45-54
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Average Savings: $313,220
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Median Savings: $115,000
With peak earning years typically occurring in this age range, retirement savings generally see growth. A majority, around 62%, of households have retirement holdings.
Ages 55-64
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Average Savings: $537,560
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Median Savings: $185,000
As individuals near retirement age, their savings reach the highest levels. About 57% of households headed by someone in this age group have retirement accounts, preparing for the transition into retirement.
Ages 65-74
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Average Savings: $609,230
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Median Savings: $200,000
Many in this age group are already retired or about to retire, with savings peaking before beginning to draw down during retirement years. Approximately 51% of households have retirement accounts.
Ages 75 and Older
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Average Savings: $462,410
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Median Savings: $130,000
Savings typically start to decrease as retirees begin to withdraw from their accounts. The percentage of people with retirement accounts also declines in this age group.
Factors Affecting Retirement Savings
A typical retiree might have a combination of 401(k) accounts, Roth IRAs and taxable investment accounts. A 62-year-old early retiree with a middle-class income of around $72,000 per year might have accumulated approximately $500,000 across various retirement accounts by living frugally and consistently saving and investing. Several factors influence the retirement savings of middle-class individuals, including:
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Income Levels: Higher earnings over the years generally lead to more significant retirement savings.
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Savings Rate: Consistently saving a percentage of income, typically 10-15%, can significantly impact the total savings accumulated by retirement.
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Investment Returns: The performance of investments over time can substantially affect the growth of retirement accounts.
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Employment Benefits: Access to employer-sponsored retirement plans like 401(k)s with matching contributions can boost savings.
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Financial Literacy: Understanding financial planning and investing can lead to better decision-making and higher savings.
Final Take To GO: The Reality for Middle-Class Retirees
Many middle-class retirees are finding themselves with a mix of savings, investments and retirement accounts. Yet, despite all of their savings and due diligence, sometimes it is still not adding up to enough to feel financially secure in their future.
To ensure a comfortable retirement and help build a robust retirement fund, financial experts recommend the following strategies:
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Start Early: The earlier you begin saving, the more you can benefit from compound interest.
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Maximize Employer Contributions: Take full advantage of employer matching contributions to your retirement accounts.
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Diversify Investments: Spread your investments across various asset classes to reduce risk and improve returns.
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Automate Savings: Set up automatic transfers to retirement accounts to ensure consistent contributions.
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Live Below Your Means: Adopting a frugal lifestyle can free up more money for savings and investments.
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Seek Professional Advice: Working with a financial advisor can help you develop a personalized retirement plan and stay on track.
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This article originally appeared on GOBankingRates.com: How Much the Average Middle-Class Person Has in Their Retirement Fund
