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Home>Daily Capital>Retirement Planning>Retirement Savings By Income – How Do You Compare?

Retirement Savings By Income – How Do You Compare?

Are you retirement-ready? Compare your savings to other Americans using data from our nationwide poll run in partnership with Kiplinger’s Personal Finance.

When it comes to gauging retirement preparedness, do you have a good sense of whether your savings are on track to fund the retirement life you envision? Realistically assessing your progress on the road to retirement is a key step in achieving your goals. But it can be challenging to pinpoint an accurate target—and even tougher to predict the future.

Looking for some benchmarks? Follow along as we explore key findings of a national poll conducted with Kiplinger’s Personal Finance. We surveyed 1,014 investors between the ages of 35 and 64, equally divided between men and women, to reveal some common measures of retirement readiness.

We’ll be releasing the results of the poll in a weekly series: “Are You Retirement-Ready?” Stay tuned for future chapters, including investing, future security, and retirement living.

But first up: saving. How do your retirement savings compare to other Americans?

How Do Americans Feel About Their Retirement Savings?

median net worth vs median income

Track your net worth easily using this free Financial Dashboard.

Americans are generally up¬beat about their progress toward saving for retirement and most are stashing away a respectable chunk of cash. Overall, our survey group is earmarking 13.3% of annual income toward retirement savings.

Not surprisingly, those who make a little more also save a little more. People with more than $100,000 in annual household income manage to free up 16% of earnings each year toward retirement savings, while those with less than $100,000 in household income squirrel away 11% annually.

Median Retirement Savings By Income

How much people have saved to date and how much money they anticipate needing in retirement also varies a great deal by household annual income (more than $100,000 vs. less than $100,000).

Actual Retirement Savings Expected Retirement Savings Needed
Higher-Income Households $670,810 $1.5M
Lower-Income Households $180,200 $648,000
Overall $327,090 $909,000

Higher-income households have saved $670,810, whereas lower-income households have saved $180,200. Higher-income households expect to need $1.5 million saved for a comfortable retirement, whereas lower-income households expect to need $648,000.

Not surprisingly, the gap between total saved and expected need is larger for higher-income households. At the same time, they should be able to bridge that gap faster. Households with incomes over $100,000 contribute more than twice as much on average to their workplace retirement accounts as lower-income households do ($17,710 vs. $8,240).

How Much Americans Are Contributing to Their Retirement Accounts

People are taking advantage of both employer and individual retirement plans, using them as a major route to retirement savings. In fact, 51% of our respondents say they contribute the maximum amount allowed by law to a workplace retirement plan. Check out some breakdowns of median dollar amounts currently being socked away each year:

Median Amount Saved Account Type
$11,910 Workplace Plan
$3,170 Traditional IRA
$4,600 Roth IRA
$13,670 Self-employment plan

Respondents are also concerned about high healthcare costs: It’s the No. 1 worry about their future retirement and the top reason people aren’t saving as much as they would like now.

Thus, some (36%) are fighting back by funding tax-advantaged Health Savings Accounts. The median annual contribution for those who have opened an account is $3,070.

How Do You Compare?

Retirement savings by age

Find out if your 401(k) balance stacks up to other Americans with this free Assessment tool.

The earlier and more you save, the greater effect compounding will have on your nest egg. It can make a big difference.

Especially if your employer offers a workplace savings plan with an employee match … if you’re not using it, you’re likely leaving money on the table. Make it a goal this year to contribute as much as possible.

Discover 4 ways to maximize your 401k savings.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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This year, my top financial priority is:

Building my emergency fund
Paying off high-interest debt
Budgeting better
Saving for a short-term goal, like a vacation or new car
Increasing my investment contributions
Maintaining status quo - I’ve got this under control

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