Reports suggest the typical American has more than $60,000 put away, and that people aged 65 to 74 are the strongest savers.
Money set aside for the future can be a sensitive topic, especially for younger adults who are still finding their financial footing.
Last year, it was widely noted that Gen Z and younger millennials were facing a “negative wealth” issue — where someone’s combined debts and liabilities are greater than the total value of their assets.
Will Snell, the Fairness Foundation’s chief executive, told The Guardian: “Right now, too many people across the UK are living without a financial cushion or are burdened by debt.
“This strips them of resilience in the face of economic shocks and shuts them out of the well-documented benefits that even modest asset ownership brings, in terms of future earnings and employment, physical and mental health, and civic engagement.”
In the United States, the Federal Reserve’s Survey of Consumer Finances (SCF) offers a snapshot of how much Americans hold in savings and other transaction accounts. In its 2022 findings, average balances ranged from $20,540 to $72,520 depending on age group.
Median figures painted a very different picture, coming in far lower — between $5,400 and $8,700.
Experian explains that average balances are “the total of all balances used in the survey divided by the number of accounts”.
It adds: “Because the data used in the SCF includes super-wealthy households, this statistical average may be larger than the reality of most Americans.”
It also clarifies why the median can be more useful for understanding typical households: “Median account balances show the middle point in the data. In other words, the point at which half the accounts surveyed are larger and half are smaller.
“According to the Fed, median values may be more representative of typical account balances for each group.”
Breaking the averages down by age in the SCF’s 2022 survey, people under 35 had about $20,540 saved on average. For those aged 35 to 44, the average climbed to $41,540.
The amount increased again among 45 to 54-year-olds, who held roughly $71,130 on average.
For the 55 to 64 bracket, the average was $72,520, before rising to its highest point among 65 to 74-year-olds at $100,250.
Those aged 75 and over were found to have $82,800 in savings on average.
Ally Bank offers general savings benchmarks tied to income: by 30, it suggests aiming for savings equal to 1x your annual income. By 40, the target rises to 3x, and by 50 to 5x.
By 60, the guideline becomes around 7x your income in savings.
However, the bank notes these targets aren’t one-size-fits-all, since the “right” amount to save depends on earnings, when you plan to retire, and the lifestyle you want in retirement.