Average Savings by Age: What the Numbers Say

Written by Banks Editorial Team
5 min. read
Written by Banks Editorial Team
5 min. read

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Many people preach saving money as a way to build wealth, but some people save more than others. Each person has a different financial situation, but we tend to have larger savings accounts as we get older. Every three years, the Federal Reserve conducts a survey that gives us an inside look at the average savings account by age. 

We will use numbers from the Fed’s 2019 Survey of Consumer Finances (SCF). New Federal Reserve data will come out in its 2022 Survey of Consumer Finances in 2023, providing a glimpse into how savings accounts have changed since the pandemic. Reviewing averages from the 2019 report will give you a benchmark and help you understand if you are moving at a good pace or need to ramp up your savings goal to hit the average savings number for your age group.

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The Importance of Saving

Having more money increases our possibilities. Vacations, homes, and cars all cost money, and you will need enough money to cover the cost of living when you retire. Not having enough funds reduces your choices and can create other problems. Worrying about not having enough money can hurt your sleep, self-esteem, and happiness. These fears can also lead to depression and tension in your relationships. 

Every dollar you save minimizes financial stress and gives you more choices. It’s easier to spend money on things you want now, but it’s more rewarding to store it in the bank and invest.

How Much Should You Save Each Month?

Each person has different capacities to save based on their income and expenses. Ideally, you should save at least 20% of your income. However, some people may have to trim their expenses to save 20% of their income. You can use a mobile banking app like Current that tracks your spending and provides insights that can help you save money. You can also look at the average savings account by age and calculate how much money you need to save each month to keep on the right pace.

Average Savings by Age in the U.S.

Many Americans add to their savings accounts, especially as they get closer to retirement and big-ticket purchases. You can use these average savings account balances as a benchmark for your finances to see if you are in line, above average, or need to increase your savings to reach the average savings amount.

Average Savings by 30

The average savings by 30 is $11,250. The median balance is $3,240.

Your 20s are some of the best years to make money and save accordingly. People complete their highest educational level before reaching this point. Some have a college degree, while others stopped at high school. American households with college degrees tend to earn more money, but high school graduates can also explore compelling career opportunities.

People in this age group start saving up for big purchases like a house and car. Young adults obtain higher-paying jobs during these years and can make meaningful contributions to their savings accounts. Student loans and other costs may restrict them, but having a salary gives them the financial means to cover their expenses.

Average Savings by 40

The average savings by 40 is $27,900. The median balance is $4,710.

Another decade of earning at work gives this group more money to save. This is a recurring theme as we reach older age groups. People save money for various reasons. Some plan for travel, while others are saving money for their child’s future college education. Some people in their 40s think about retirement. More people think of retirement savings as they get older, which explains the surge in savings for the 50-year-old group. People approaching their 40s may also leave money aside for an emergency fund as a backup.

Average Savings by 50

The average savings by 50 is $48,200. The median balance is $5,620.

The average retirement savings account jumps by over $20,000 between 40-year-olds and 50-year-olds. Inflation has been in the headlines for over a year, but it’s always present in the economy. The Fed believes an annual 2% inflation rate is healthy for the economy. Consumers may notice more goods becoming more expensive as they get older and become more cautious about having enough for retirement. Some people in this age group may seek help from financial advisors at this point to prepare for retirement.

Earn 4.00% APY on your Savings
Mobile banking done better. No overdraft fees/hidden fees. Get paid up to two days faster with direct deposit. Earn up to 15x the points on swipes.

Average Savings by 60

The average savings by 60 is $57,800. The median balance is $6,400.

At this stage, almost everyone is thinking about retirement and social security benefits. Some people in this age group will scramble in their 50s to accumulate as much cash as possible. That’s why individual retirement accounts have catch-up programs for people over 50 years old. The IRS adjusts maximum contribution limits from time to time, but people who are over 50 years old can usually contribute an additional $1,000 to their IRAs each year. Some of the catch-ups explain the increase in median retirement savings.

How to Maximize Your Savings

Increasing your income gives you more savings opportunities, but higher earnings aren’t the only way to increase your savings account. Making more money can hurt your finances if you inflate your lifestyle based on your earnings. Lifestyle inflation can increase your debt and lead you into a precarious position, especially if your income takes a hit. 

While it’s great to make income, we can immediately address our expenses and become more effective at managing our money. Mastering these core components will help you save more of what you earn. In addition, you can incorporate these strategies to maximize your savings.

Set Your Savings Goals and Financial Priorities

Goal setting gives you a target and refines your focus. Having savings goals for the month, year, and other intervals will make you more conscious of every dollar you spend. Goals inspire us to take action and address our financial priorities.

Track Your Spending

Tracking your spending can help you save money, especially if you have never done it before. Many consumers underestimate how each subscription and habitual purchase eat into their savings. A Netflix subscription won’t break the bank, but having several subscriptions adds up. You may have forgotten about some of your subscriptions and no longer have a need for them. Current’s spending insights make it easy to track your spending and discover new opportunities to save.

Learn to Budget and Manage Your Finances

Budgets act as the safety brakes for our finances. Spending within the confines of a budget teaches money management and can increase your savings. The 50/30/20 Rule encourages people to spend 50% of their income on necessities, 30% of their income on wants, and 20% on savings. Some people minimize how much they spend on wants to grow their savings quicker.

Pay Off Your Debts

Any unpaid debt will accrue interest and become more difficult to pay off. The debt snowball can catch many people by surprise. Prioritizing debt repayment will reduce your financial stress and keep your expenses low. Having less debt will also improve your credit score and help you qualify for better loans. This advantage will become crucial if you apply for a mortgage or auto loan. A higher credit score helps you secure lower interest rates that can save you hundreds of dollars every month.

Invest Your Money

People work for several decades to earn money, but you can have some of that money work for you. Investing your money into various assets, such as stocks and crypto, will help you earn higher returns on your investments. Younger investors usually accumulate growth investments, while older investors focus on safer assets like bonds and blue-chip dividend stocks. Setting a monthly contribution goal for your portfolio can keep you on target and strengthen your money management.

Automate Your Savings

Will you remember to invest in your portfolio each month? What about moving money from your checking account to your savings account? The Current bank app can do all of these for you through its automation features. The fintech company can automate portfolio contributions and transfers to savings accounts so you can focus on earning money. 

Sign Up for a High-Yield Savings Account

Most savings accounts offer interest rates so low that they’re not worth mentioning. These low-interest rates aren’t encouraging, and your money will grow at a snail’s pace. However, you can put your funds in a savings account with a better yield. You can save money in your Current account and receive 4% APY without touching your cash. That rate of return is better than most bonds, and you can access your cash at any time. 

The high-yield savings account isn’t the only thing that makes Current special. The fintech company has features that help you save money, build a diversified portfolio, and stay safe from overdraft fees. You can open a bank account with Current by visiting their website or downloading the mobile app.

Earn 4.00% APY on your Savings
Mobile banking done better. No overdraft fees/hidden fees. Get paid up to two days faster with direct deposit. Earn up to 15x the points on swipes.

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