A recent study from thecareer experts Zetysays that 40% of respondents fear retirement more than death. And almost nine in 10 responded that their biggest retirement fear is not having enough income.For married couples, planning retirement for two people can be complicated.How much they will need will depend on their financial circ*mstances. Here’s a breakdown of the average retirement savings for couples by age.
A financial expert could help you create a financial plan for your retirement needs and goals.
What Are Average Retirement Savings By Age?
Unfortunately, many Americans aren’t putting enough money away for their future. In fact, 25% of Americans have no retirement savingsat all according to a report from PWC. And among those who haven’t saved enough for retirement, EBRI research estimates that households as of January 2020 saved $3.68 trillion less than what they should have in their retirement accounts.
Another study by Vanguard calculated the average 401(k) balances by age. The table below breaks down average and median balances by age group:
401(k) Balances By Age Group Age Average 401(k) Balance Median 401(k) Balance <25 $6,718 $2,240 25-34 $33,272 $13,265 35-44 $86,582 $32,664 45-54 $161,079 $56,722 55-64 $232,379 $84,714 65+ $255,151 $82,297
On average, someone under age 25 is saving less than $7,000, while someone between ages 55 and 64 averages just over $232,000. This data breaks down individual balances by age group, butfor married couples, targets will differ depending on the couple’s age, household income and whether there is a sole earner or dual income.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Retirement Savings Benchmarks for Married Couples
Financial experts say that a couple aged 60 with a dual income of $75,000 per year should have seven times their household income in their retirement account. Thismultiplies to a total of $525,000 saved. Conversely, a couple aged 65 with a sole earner bringing in $75,000 per year should have saved seven and a half times their household income, whichadds up to $562,500 in their retirement account.
The table below breaks down savings targets based on data assumptions made by theinvestment management firm T.Rowe Price. In parenthesis you will see how many times over your current household income you should have:
Household Income Married, Dual Income at Age 55 Married, Dual Income at Age 65 Married, Single Income at Age 55 Married, Single Income at Age 65 $75,000 $412,500 (5.5x) $675,000 (9x) $337,500 (4.5x) $562,500 (7.5x) $100,000 $600,000 (6x) $1 Million (10x) $500,000 (5x) $850,000 (8.5x) $150,000 $975,000 (6.5x) $1.575 Million (10.5x) $900,000 (6x) $1.500 Million (10x) $200,000 $1.300 Million (6.5x) $2.200 Million(11x) $1.400 million (7x) $2.300 Million (11.5x) $250,000 $1.700 Million (7x) $2.875 Million (11.5x) $1.875 Million (7.5x) $3.125 Million (12.5x) Why You Should Not Rely on Social Security Alone
As of January 2022, retired couples who receive Social Security benefits collect an average of $2,753 per month. This amount equates to what you could get with a minimum wage job. So, for many American couples, this might not be sufficient to maintain their lifestyle once they enter into their golden years.
On top of that, manyolder Americans are carrying more debt, which will eat into their Social Security income. So when you’re creating a retirement planas a couple, financial experts will advise to assess your financial situation and make adjustments accordingly.
Regardless of your income level, mapping out your financial situation is a smart way to prepare for retirement. This big picture perspective will help yoube more intentional with how much money you are putting into your retirement savings and avoid a possible income gap later in life if your needs outpace your savings.
Bottom Line
When looking at the average retirement savings for married couples by age, the data is sobering. Even if you save more than the recommended amounts and plan to apply for Social Security benefits, you may still not have enough to live the life you desire in retirement.Financial professionals often treatretirement savings as a destination with several checkpoints along the road. While some experts recommend you save at least one year’s worth of your household income by the time you reach age 30, it doesn’t hurt to save even more.
When you are ready to retire, it’s a good benchmark to strive for at least 9x to 11x your household income in savings. But because your needs will vary as a married couple, you will need to assess your financial situation and make adjustments accordingly.A good rule of thumb is to save between at least 10% and 15% of your household income each year.
Tips to Help You Save for Retirement
According to the Federal Reserve, 60% of those with self-directed retirement accounts are not confident about their investment decisions. If you’re one of them, why not hire a financial advisor? SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Counting on Social Security benefits alone likely won’t provide full support for your current lifestyle. But, benefits can definitely help with your living expenses in retirement. SmartAsset’sSocial Security calculatorwill help you estimatehow much of a benefit you can expect.
And, if you want to figure out whether you are saving enough for retirement, SmartAsset’s free retirement calculator can help you determine how much you will need.
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As an enthusiast in personal finance and retirement planning, my extensive knowledge in the field allows me to provide valuable insights into the concepts discussed in the article. My understanding is grounded in various reputable studies, reports, and industry benchmarks.
Let's delve into the key concepts presented in the article:
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Retirement Fears and Concerns: The article highlights that 40% of respondents fear retirement more than death, emphasizing the anxiety people associate with financial planning for their later years. This sentiment is supported by studies conducted by career experts at Zety.
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Primary Retirement Fear: Almost nine in 10 respondents express concern about not having enough income during retirement. This fear is widespread and underscores the importance of effective financial planning to ensure a comfortable retirement.
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Retirement Savings Statistics: The article references data from PWC, indicating that 25% of Americans have no retirement savings. Additionally, EBRI research estimates that as of January 2020, households saved $3.68 trillion less than required in their retirement accounts.
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401(k) Balances by Age: Vanguard's study provides a breakdown of average and median 401(k) balances by age group. This data offers insights into the savings habits of individuals at different life stages, with notable variations in balances across age categories.
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Retirement Savings Benchmarks for Couples: The article introduces savings benchmarks for married couples based on age, household income, and whether there is a dual or single income. T.Rowe Price's assumptions provide guidance on the recommended multiples of current household income that couples should aim to have in their retirement accounts.
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Social Security Considerations: The article emphasizes the limitations of relying solely on Social Security benefits for retirement income. It highlights that, as of January 2022, retired couples receiving Social Security collect an average of $2,753 per month. The article suggests that this might not be sufficient for many couples to maintain their desired lifestyle in retirement.
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Debt Impact on Social Security Income: The article mentions that older Americans carrying more debt may see a reduction in their Social Security income. This underscores the need for a comprehensive retirement plan that considers debt management.
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Financial Planning Recommendations: Financial experts recommend assessing individual financial situations and making adjustments accordingly. The article stresses the importance of a big-picture perspective, intentional savings, and avoiding a potential income gap later in life.
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Retirement Savings as a Destination: Financial professionals view retirement savings as a destination with multiple checkpoints along the way. The article suggests that saving at least 9x to 11x your household income by retirement is a good benchmark, with the acknowledgment that needs will vary for married couples.
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Saving Percentage Recommendations: A general rule of thumb is provided, advising individuals to save between 10% and 15% of their household income each year for retirement. This guideline aims to help individuals work towards their savings goals.
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Tips to Help You Save for Retirement: The article concludes with practical tips, suggesting the use of financial advisors to boost confidence in investment decisions. It also recommends utilizing tools like SmartAsset's Social Security calculator and retirement calculator to estimate benefits and determine savings needs.
In summary, the article covers a range of topics related to retirement planning, offering insights, statistics, and benchmarks to guide individuals, especially married couples, in securing their financial future.
