We might not be able to look at our peers’ account statements, but we can get an estimate of how our own debits and credits stack up by looking at the median savings by age.
Experts usually advise setting aside three to six months’ worth of living costs (not counting retirement savings or other assets). Hitting the goal can be easier said than done for others. Regardless of whether you’re still working toward your savings goal or have already achieved it with room to spare, knowing what others have saved can be a useful benchmark.
There was a survey for around 1,600 American adults with at least one saving account to compare savings account rates. If they had more than one savings account, Americans were asked for the current balance in the one with the largest balance. Here’s a peek at average balances for savers of various ages.
Since some respondents’ balances were substantially higher than others’, the average savings by age is greater than the median.
For people aged 18-34, the median savings is somewhat around $1000
You need to save money for goals like paying off education loans and keeping money there for a first home if you are in this age group. But it’s still crucial to save money in an emergency accounts fund so that expenses in unexpected situations don’t throw your financial plans off course. You can start with a few to little deposits and try to put it in a bank with high savings account interest rates and encounter your savings grow over time.
For people aged 35-45, the median savings is somewhat around $2700
If you’re in this age category, either you’re farther along in your career and making more money than you were a decade ago, or you’ve had more opportunities to benefit from compound interest. That’s the money you make on your bank account, plus the interest you receive on it, even if the savings account interest rates are not very high.
Make sure you’re working for other goals, such as saving for retirement and paying off loans, while still prioritizing your emergency fund, regardless of how much you’ve set aside.
For people aged 45 to 54, the median savings is somewhat around $4,000
This number is higher than for younger age groups, owing to the fact that you have had more years to invest and have had more opportunities to benefit from compound interest. Around the same time, you might be thinking about retirement planning after 50; you will, for example, make catch-up contributions to a retirement account. Just bear in mind to keep your cash buffer topped up.
For people aged 55 to 64, the median savings is around $5,000
If you’re in this age group, you’ve already saved more money than you have at other times in your life. After all, according to the Bureau of Labor Statistics, this age group earns the highest income, so it’s no surprise that it often saves the most money.
Consider placing your money in a high-interest deposit, regardless of your bank balance. It has the potential to help you earn more interest in the long run.
For those aged 65 and over, the median savings is $5,000
If you’ve already retired or are going to retire soon, you may be able to use your retirement funds to cover living expenses. When unplanned expenses occur, however, having a savings account is still necessary.
How do you save more money?
- If you want to increase the amount of money in your bank account, a successful first move is to look at your current expenses and see where you can save more money.
- Create a recurring, automatic transfer from your checking account to your savings account, maybe once a payday, to use as a “set it and forget it” strategy. Putting aside $25 per two weeks over a year contributes to a savings of $650.
- Put your money in a bank that gives high savings account interest rates; thus, giving savings accounts to make your money work even harder for you. Assume you have $8,000 in your bank account.
- The typical savings account pays just a 0.05 per cent annual percentage yield, which means that after a year, your money would have earned less than $7 in interest; always compare savings account rates before putting your money in any bank.
- Deposit this very same amount in a 1.9 per cent high-yield account, and your balance will rise by more than $80 in a year with no extra effort on your part.
One way to evaluate your savings activities is to look at the median savings account balance by age. However, there is never a bad time to increase your savings. At any age, putting your money in a high-yield account and setting up a proper savings plan will help you build up your savings.