Retirement savings average $600,000 but median trails at $200,000

The average U.S. saver aged 65 to 74 holds about $600,000 in retirement savings, the peak for any age group, per the U.S. Federal Reserve. The median is just $200,000.

The figures come from the Federal Reserve's household survey data, which shows retirement balances peak in the 65-to-74 cohort before retirees begin drawing down savings in later years.

The gap between the mean and median is stark. The median saver in that bracket holds $200,000 — a level that would be difficult to retire on. The divide reflects how a small number of high-balance households pull the average up, while most savers hold far less.

Because averages can mislead, financial planners increasingly recommend income-based targets. A common rule of thumb calls for saving 10 times your salary by age 67, with intermediate milestones of 1x by 30, 2x by 35, 3x by 40, 4x by 45, 6x by 50, 7x by 55, and 8x by 60.

The $400,000 gap between mean and median

The $600,000 average and $200,000 median differ by $400,000, a spread that illustrates how a handful of large balances distort the picture. If a single high-net-worth household sits in a room with ten savers who have nothing, the average still runs into the millions. The median, by contrast, splits the sample in half — half above, half below — giving a truer read of what a typical retiree actually has.

That $200,000 median is a troubling figure. Retiring on that amount, even combined with Social Security benefits, would require careful budgeting. The average, meanwhile, flatters the picture for most households that fall below it.

The divide also shows up across account types. Balances in 401(k) plans and individual retirement accounts vary widely by income, employer match generosity, and how consistently contributions were made over a working life. A saver who started early with a matching employer can accumulate multiples of someone who began late without one.

Targeting 10x salary by age 67

Because saving is an individual exercise tied to income, a fixed dollar target rarely fits. The 10x-salary rule of thumb scales the goal to what each person earns. Someone earning $80,000 would aim for $800,000 by 67; a $120,000 earner would target $1.2 million.

The intermediate milestones keep savers on track: 1x by 30, 2x by 35, 3x by 40, 4x by 45, 6x by 50, 7x by 55, and 8x by 60. Missing a milestone early is easier to correct than falling behind late, when compounding has less time to work. A saver who hits 3x by 40 but falls to 5x by 50 still has a decade of contributions and market growth to close the gap.

The takeaway is not to chase the $600,000 average, which reflects the top of the distribution, nor to accept the $200,000 median as adequate. Savers are better served by a target tied to their own income and spending needs. For those approaching retirement, the 10x benchmark offers a concrete checkpoint — and Social Security benefits, which the Social Security Administration adjusts annually for cost of living, provide a base layer that reduces how much personal savings must cover.

The Federal Reserve figures reflect the most recent survey period and can shift with market conditions and contribution patterns. Savers should verify current data against the latest official release from the Federal Reserve before setting targets.

This article is for informational purposes only and does not constitute investment advice.