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Average Savings by Age: How Does Your Balance Measure Up?
Jenius Bank Team6/30/2023 • Updated 8/20/2024
Comparing your account balance to others may help you determine your savings goals.Let’s face it – life gets expensive. And while many of those expenses are planned, like buying a new car or adopting a new furry family member, others could catch you completely by surprise. And they almost always happen at the wrong time.Having savings on hand may make it easier to manage those extra purchases and expenses. But how much should you set aside while also leaving room to enjoy life? Let’s look at some recent statistics and tips to help you decide how much you should keep in savings based on your personal situation.
*The numbers in these charts come from transaction accounts. Transaction accounts include checking, savings, money market accounts, pre-paid debit cards, and other accounts where funds are easily accessible. They don’t include retirement savings accounts.Comparing your accessible (or liquid) savings tends to be more difficult than comparing your retirement savings to others in your age. This is because retirement savings are often easier to calculate since most people retire at roughly the same age. Accessible savings tend to be more individualized, which is why the chart above is a useful guide for comparison, but it’s not meant as a rule.Individuals at the same age may have different life stages, different lifestyles, and different expenses. That’s why creating a savings strategy built around your needs and goals rather than your birth date is typically a better choice.
Key Takeaways
- Comparing your savings to others in your age group may help you determine if your savings are on track.
- Average savings balances tend to be higher as you get older, but it’s important to personalize your savings strategy to your unique needs and goals.
- It may be helpful to split your savings into two general categories: emergency savings and savings for other purposes.
Average Savings Account Balance
When it comes to savings, more always seems better, right? But that doesn’t mean you need to save every penny you make after covering your essentials each month. The chart below shows the average savings balance per household based on the most recent Federal Reserve’s Survey of Consumer Finances.1Average Savings by Age*| Age | Average Balance |
|---|---|
| Under 35 | $20,540 |
| 35-44 | $41,540 |
| 45-54 | $71,130 |
| 55-64 | $72,520 |
| 65-74 | $100,250 |
| 74+ | $82,800 |
How to Better Build Your Savings
If you find that your savings are lower than what’s average for your age, don’t panic. There are things you could do to start building your savings. Here are a few key tips to keep in mind.Determine Your Savings Goals
You may find it helpful to think about savings in two main buckets: emergency savings and savings for planned purchases. By establishing different categories, you could find it easier to track your progress and stay motivated to build your savings . Think about what you want to save for. This could be a vacation, a new car, a down payment on a home, or anything else you’re hoping to purchase in the future. You could even create a dedicated savings account for each category to help you track progress toward each goal.Create an Emergency Savings Fund
Many of us know that it’s important to save for a rainy day—putting a little aside for the unexpected expenses that come up in life. But are you ready for a downpour? Creating an emergency fund could help you better prepare for biggest or most unexpected expenses, including if you were to lose your job. With that example in mind, experts recommend setting aside between three and six months of living expenses in an emergency fund so that you could sustain yourself while searching for a new job.Since each person or family’s living expenses are different, calculate the target emergency fund amount for your situation. Here are a few tips to help:- Figure out how much you spend: Track your expenses for a month or two to get an idea of how much money you need to maintain your current lifestyle. Most experts recommend only including your essential costs for this calculation, meaning you should exclude purchases you’d stop making during a time of financial strain, such as eating out or entertainment purchases.
- Multiply that amount: Once you have your monthly target in mind, multiply that amount by the number of months you want to save for. If you’re single and flexible about where you live or your lifestyle, you could choose fewer months. However, if you’re the primary breadwinner for a family, you may want enough savings on hand to cover a longer period of time.
Build Out Plans for Other Savings Goals
Once you have your emergency fund started, start saving toward other goals. Depending on your income and your spending habits, you may only be able to set $100 aside each month. That’s okay. The important thing is to start saving.Consider setting up automatic transfers from your checking account to your savings account so you won’t have to worry about forgetting to save.Understand Your Options
There’s really no wrong way to save money, but some methods may work better for you than others. For example, you may find that setting up separate accounts for each goal, like a vacation fund or a wedding fund, makes it easier for you to track your growth over time.Once you have an idea of your savings goals, explore the different types of savings accounts that you have access to. Here are a few of the most common options people choose from.- High-yield savings accounts (HYSAs): HYSAs often offer higher rates, expressed as Annual Percentage Yield (APY) than traditional savings accounts, which may help your money grow faster with compound interest. Compound interest is what you earn on the money you keep in the account as well as any interest payments made to the account in previous months.
- Certificates of Deposit (CDs): CDs typically offer higher APYs than other savings products in exchange for making your savings less liquid for a set period, called a term. CD terms usually last anywhere from a few months to several years, and if you withdraw your funds before the end of the term, you may have to pay a penalty.
- Investments: Investments are another way to grow your wealth. Investing may be appealing because the upside is sometimes significant. But with market risk also comes the potential for losses. So, before you start, talk to a financial advisor or investment professional who can help you determine your risk tolerance and recommend a strategy based on your goals.
Final Thoughts
Saving money is a personal, lifelong journey. While it may be useful to compare your current savings balance to others in your age group, remember that everyone’s financial situation is unique. When it comes to living a richer life, having a handle on your savings could make a major difference. Watching your money grow could be quite rewarding. And with funds on hand, you may sleep better at night and be better prepared for the not-so-fun surprises that sometimes come up in life.Saving & CheckingLifestyle