As you prepare for retirement, you might look at how much you have
saved and wonder how that compares to others. And it's not always a
great idea to compare yourself to others, but this is something that clients
often wonder about. They ask, "How am I doing relative to people my
age, what's the average savings of a 60 year old?" for example.
So we're going to look at a couple of different information sources.
They all approach this from a different angle, and so hopefully one or
all of them will paint the picture for you in a way that
is useful and that satisfies your curiosity. And by the way,
I will include a link in the description that will help get you
to all of these different data sources if you want to dig in
deeper. What you need to know is, of course, nothing is perfect,
so it might not be all inclusive. Some of these don't include people's
401k versus IRA, so there might be some missing information there,
and then the way they present the data or measure it might not
be perfect because maybe they're using a mean versus a median,
maybe they're not including people who have zero retirement savings, that
sort of thing. So you just need to take it with a grain
of salt as you go through these. I like the TD Ameritrade and
Harris Poll because it doesn't give you just one average number.
As we know, one single number is just not going to paint the
picture accurately. The fact is that people fall into ranges or maybe categories.
So they look at one million plus or 500,000 to 999,000 of savings,
and this can help you maybe get an idea, given your age range,
where you might fall on this type of chart. As you can see,
having more than a million dollars at almost any age makes you quite
fortunate. It's a small percentage of people, but it is a lot of
people because we have a lot of people in the US,
of course. And you can see some other interesting things by each age
group. Not surprisingly, the older you are, the more you tend to have
in assets. So let's move on to the Fed's study, but before I
do, we'll do math in hopefully 30 seconds or less as a refresher.
That's because they report the data as a mean or median.
So, quick refresher, the median is the middle. You've got these numbers
that are lined up from smallest to biggest, so this might be an
answer to the question, "How much do you have saved for retirement?"
And they line everybody up, and the median is going to be this
one in the middle of that range. Tthen, when we go to the
mean, which is also the average, it can be skewed by large numbers
on one end or the other, or a bunch of numbers clumped together.
So what we have is the same range of numbers, but the average
is 1000. That's a lot different from that 300, and that's because maybe
in our example, these are really wealthy people who have a lot saved
for retirement and they're bringing up the average... So if we go to
the Fed's Survey of Consumer Finances, we're going to start with the median
here, and that shows us different age ranges over time, how much people
have had saved for retirement and age... 65 to 74,
as you can see is about 164,000. Then if we go to the
mean again, this should be a higher number because this is averages that
can be skewed or brought up by people with substantial savings.
That number is quite a bit higher again, for that 65 to 74
age range. Moving on to Fidelity, they have a lot of information on
IRAS, 401ks and 403bs. And by the way, I do want to ask,
please subscribe to this channel. It doesn't cost you anything, and it helps
you stay up to date on things like this, it also helps me
out a tiny bit, so... Thank You for doing that, and thanks to
everybody who has already subscribed. The Fidelity information shows you
mostly these workplace plans, and then they do break it down into those
tax exempt organizations versus the 401k organizations. I realize that's
not a perfectly clean split, but I'm not going to go through all
of these, you can pause this if you want to take a closer
look, but that's what Fidelity tells us about peoples' retirement savings
at this point. Then Boston College takes an interesting view of things.
It does look at men, women and couples, so that may be interesting.
If you are either coupled or single, you may find this to be
more useful information. So not surprisingly, a couple has more financial
resources in most cases, not necessarily double that of a single person,
but it is a higher, of course. What's important to know as you
look at these numbers is that it's not just a score board.
So you don't necessarily just want to look at this and compare yourself
to the average or the median[or anything else].
What is most important is that you eventually have the assets or the resources,
whether that's income from Social Security or pension, or the assets that
are going to create your income to give you the retirement you want
to help you pay for the healthcare and the food and the bills,
and the housing and the travel and the fun during retirement.
So that is, of course, what I help clients do. Please let me
know if you'd like to talk about doing that together. I really hope
you found this information helpful and take care.