Distribution Of Retirement Savings By Age


Have A Realistic Understanding Of When You Want To Retire

Investing Insights: Retirement Savings, Withdrawal Rates, and Market Volatility

Having clearly defined goals will help you determine how much you should have saved based on your personal goals. Your savings objectives will be different if you plan to retire at 50 than if you plan to continue working past 70. Additionally, its important to determine as accurately as you can what your cost of living will be in retirement. How much do you need to spend per year to maintain the lifestyle that you want for the rest of your life? Have a good sense of what your costs will be so you can factor that into your overall retirement strategy. Really evaluate how long you want to continue working, and what retirement age is realistic for you based on your income and your current level of savings.

How To Calculate Your Rmd

For most people, calculating your RMD is straightforward. Simply divide the balance of each qualifying retirement account on December 31 of the preceding year by your life expectancy factor in the IRS Uniform Lifetime Table.

If your sole designated beneficiary is a spouse whos more than 10 years younger, you may base RMD calculations on the longer joint and survivor life expectancy , potentially offering a longer payout period.

You must calculate RMDs for each qualified retirement plan. However, you can aggregate the withdrawal from any one or more IRAs .

Focus On The Growth Potential Of Stocks

With several decades left until full retirement age, millennials should focus on stocks, as they will have enough time to benefit from the long-term growth potential while riding out any short-term volatility.

Asset Allocation in Your 20s and 30s

You should be focused primarily on the growth potential of stocks in your retirement savings.

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Average Retirement Savings Of Americans With A College Degree: $119000

Educational attainment has a dramatic impact on retirement savings.

The median retirement account value for someone with no high school diploma was $20,000, nearly $100,000 less than someone with a college degree. And Americans with a high school diploma had median retirement savings of $40,000, double those who had no high school diploma.

The impact of educational attainment on retirement savings has become more pronounced over the past 30 years.

In 1989, Americans with a college degree had saved about $4,000 more than those with no high school diploma, who had saved $19,890 on average. And Americans with a high school diploma had saved just $1,020 more than those without one.

The average savings of those with a college degree has grown by $85,010 since 1989, growing faster than those with no high school diploma and those with no college degree.

Median retirement account value by level of education


Data source: Board of Governors of the Federal Reserve System .

Keeping Average Savings In Perspective

Many Americans Still Lack Retirement Savings

The average retirement savings is $95,776 across all age groups, according to the EPI. Overall, the data suggests that Americans are simply not saving enough for retirement, regardless of age.

As you evaluate your own plan, don’t let the average retirement savings by age distract you from your goals.

Comparing your savings to those of others in your age group can be instructive, but the more important issue is whether what you’re saving now will allow you to have the kind of retirement you desire.

If your savings are below the average for your age group, it’s time to reconsider your plan and determine what you can do to get back on course. You might consider increasing your elective salary deferrals if you’re not saving enough in your employer’s plan to get the full matching contribution, or use an IRA to grow your savings if you don’t have access to a 401.

Being realistic about your retirement timeline is also necessary. You might have to consider staying in your full-time job longer or working part-time after you retire to make up for any shortfall if you have less saved than you’d like. Calculating how much you need to retire, looking at what you already have saved, and determining how much you’ll need to reach your goal can help you shape your plan more effectively.

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Leave Your Retirement Savings In Your Former Qrp If The Qrp Allows

While this approach requires nothing of you in the short term, managing multiple retirement accounts can be cumbersome and confusing in the long run. And, you will continue to be subject to the QRPs rules regarding investment choices, distribution options, and loan availability. If you choose to leave your savings with your former employer, remember to periodically review your investments and carefully track associated account documents and information.


  • Your former employer may not allow you to keep your assets in the plan.
  • You must maintain a relationship with your former employer, possibly for decades.
  • You generally are allowed to repay an outstanding loan within a short period of time.
  • Additional contributions are generally not allowed. In addition to ordinary income tax, distributions prior to age 59½ may be subject to a 10% additional tax.
  • RMDs, from your former employers plan, begin April 1 following the year you reach age 72 and continue annually thereafter, to avoid IRS penalties.
  • RMDs must be taken from each QRP including designated Roth accounts aggregation is not allowed.
  • Not all employer-sponsored plans have bankruptcy and creditor protection under ERISA.

If you choose this option, remember to periodically review your investments, carefully track associated paperwork and documents, and take RMDs from each of your retirement accounts.

Selling Investments In Tax

When selling assets, a general guideline is to tap investments in taxable accounts before taking money from tax-deferred or tax-free accounts, such as a traditional or Roth individual retirement account or a 401.

Thats assuming you have enough retirement savings in taxable brokerage accounts and havent yet reached age 72 , the age when the IRS requires you to begin taking required minimum distributions from traditional IRA or 401 accounts.

Tapping your IRA earlier means losing potential opportunities for tax-deferred compound growth. A possible exception is if your IRA balance is very large relative to other savings or if you need the money sooner. In that case, you might want to start taking distributions before you reach age 72.

Otherwise, when you start taking RMDs after age 72, you might be bumped up to a higher tax bracket. Withdrawals of pre-tax contributions and income from traditional IRAs and 401s are treated as ordinary incomewhich is typically taxed at a higher rate than long-term capital gains in taxable accounts.2

Talk with your advisor or a tax professional to time your retirement income distributions wisely.

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Retirement Age: 51% Of Americans Retire At 61 Or Younger

Data shows that, in 2019, 51% of Americans retired at 61 or earlier, and 23% retired between 62 and 64, before Medicare coverage kicks in at 65.

And, despite white Americans having higher retirement savings on average, their average retirement age tends to be higher than Black and Hispanic Americans.


Data source: Board of Governors of the Federal Reserve System .

Youre Our First Priorityevery Time

Rule 72(t): No Penalties on Retirement Withdrawals Before Age 59-1/2

NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.

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Average Retirement Savings By Race: White Americans Saved $45000 More Than Black Americans

Its well documented that race can play a decisive factor in income and other measures of financial wellbeing. That’s true when it comes to retirement savings as well.

White Americans had a median average retirement account value of $80,000 — $45,000 more than black Americans and $49,000 more than hispanic Americans.

Similar to the impact educational attainment has on retirement savings, the median value of retirement savings for white Americans has grown faster than Black and Hispanic Americans since 1989.

Median retirement account value by race or ethnicity


Data source: Board of Governors of the Federal Reserve System .

How Much Should I Have In My 401 By Age 30

While you may not be able to afford to make the maximum 401 contribution early in your career, the more you contribute at a young age, the more time your money has to grow.

Investing early also gives you a longer timeline to weather any stock market downturns, so that you are more likely to reach the balance you need for retirement. According to the most recent data from the Federal Reserve, the average retirement savings for workers under 35 with a 401 balance was about $30,000.

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Your First And Subsequent Rmds

Your first RMD is due the year you reach age 72. You can elect to take it during that year or delay it until April 1 of the following year. This date is called your Required Beginning Date.

All subsequent RMDs must be taken no later than December 31 of each calendar year, until you die, or your balance reaches zero. Thus, if you delay your first distribution, youll have to take two distributions in one year: your first-year distribution , plus your second year distribution .

If you continue working after age 72 and still participate in your employers retirement plan, your Required Beginning Date for that plan can be as late as April 1 of the calendar year following your retirement . Subsequent distributions must still occur on or before December 31 of each subsequent year.

Defined Benefit And Money Purchase Pension Plans

The Average Americans Retirement Savings By Age

Full accrued benefit — the plan will set a normal retirement age, which is when you will be eligible to receive your full accrued benefit.

Early or phased retirement — the plan may permit earlier distributions when you:

  • turn age 59 1/2 or
  • terminate employment .

The plan may require a reasonable period of time after your request to calculate the benefit and determine the payment schedule, or to value the account balance and to liquidate any investments in which the account is invested.

Form of benefit –Defined benefit and money purchase plans must offer a benefit in the form of a life annuity, which means that the participant will receive equal, periodic payments, often as a monthly benefit, that continue for the rest of the participants life. A married participant must be offered a Qualified Joint and Survivor Annuity. The plan may also offer other payment options.

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Average Savings By Age 60

Individuals in their 60s are often in the home stretch for retirement and its time to put the pedal to the metal to reach those financial goals. The focus on retirement is reflected in the average savings by age 60, with data showing you should have at least $16,554 to $33,108 in savings but $433,559 in retirement savings.2 This may seem lofty, but stay on track and it will be well worth it when you are ready to leave the workforce and enjoy your retirement.

Average Savings For 20

Between stagnating wages and heavy student loan debt, millennials face some of the biggest challenges when saving for retirement, but a Bankrate survey indicates that they’re actually taking the lead when it comes to proactively contributing to their retirement plans.

The Transamerica Center for Retirement Studies estimates that the median retirement savings for millennials are about $23,000. According to Fidelity, the typical saver should aim to have one year’s worth of salary saved by age 30. A 25-year-old should aim to have 25% to 50% of that number.

Data from the Bureau of Labor Statistics shows that the average 25-year-old earns a median annual salary of $51,168. A 20-something with a median of $31,000 in savings could reasonably be on the right track to having a year’s worth of income saved by age 30.

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What Is The Average And Median Retirement Savings

The average retirement savings for all families is $255,130 according to the 2019 Survey of Consumer Finances.

Taken on their own, those numbers arent incredibly helpful. There are a variety of decent retirement savings benchmarks out there, but how much money other people have isnt one of them. Even breaking the numbers down by age wont give you a great picture of where your own finances should be. After all, age is just one factor in how much you should save for retirement and not everyone who is the same age will retire at the same time.

But retirement savings balances do tend to increase with age, as they should the closer you are to retirement, the more you should have stashed away.

» Check out our retirement planning guideif you need to rework your game plan

Average Savings By Age 50

You’re Retiring. Now What? Retirement Planning: A Reassessment [2022]

The biggest expenses for people in their 50s are often college tuition payments for their children and rising medical bills. But they also have their eye on the prize, retirement, and that means more aggressive saving. When considering average savings by age 50, data shows you should have at least $18,846 to $37,693 in savings and $309,685 in retirement savings.2

Realizing youre behind on retirement savings in your 50s may induce some panic, so take advantage of this wakeup call and the catch-up opportunities available to others in your situation. Go for the max on your 401 contributions in addition to whatever catch-up contributions are allowed. And make that money work for you! It can grow tax-deferred until you withdraw it, so so consider investing in a mix of stocks, bonds and cash. An independent financial professional can help you determine what level of risk is appropriate, if youre unsure. You may also consider adding an IRA, if you havent already, or saving in a regular brokerage account.4

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Retirement Plan And Ira Required Minimum Distributions Faqs

Information on this page may be affected by coronavirus relief for retirement plans and IRAs.

The Setting Every Community Up for Retirement Enhancement Act of 2019 became law on December 20, 2019. The Secure Act made major changes to the RMD rules. If you reached the age of 70½ in 2019 the prior rule applies, and you must take your first RMD by April 1, 2020. If you reach age 70 ½ in 2020 or later you must take your first RMD by April 1 of the year after you reach 72.

For defined contribution plan participants, or Individual Retirement Account owners, who die after December 31, 2019, , the SECURE Act requires the entire balance of the participant’s account be distributed within ten years. There is an exception for a surviving spouse, a child who has not reached the age of majority, a disabled or chronically ill person or a person not more than ten years younger than the employee or IRA account owner. The new 10-year rule applies regardless of whether the participant dies before, on, or after, the required beginning date, now age 72.

Your required minimum distribution is the minimum amount you must withdraw from your account each year. You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account when you reach age 72 . Roth IRAs do not require withdrawals until after the death of the owner.

For more information on IRAs, including required withdrawals, see:

Plan Balances By Generation

The good news is that Americans have been making an effort to save more. According to Fidelity Investments, the financial services firm that administers more than $9.8 trillion in assets, the average 401 plan balance reached $112,300 in the fourth quarter of 2019. That’s a 17% increase from $95,600 in Q4 2018.

How does that break down by age? Here’s how Fidelity crunches the numbers.

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Keep Your Money In The Plan

You can leave your savings in your employer’s retirement savings plan if your account balance was more than $5,000 at any time, depending on your plan’s rules. Minimum distributions generally must begin when you reach age 70½ or when you retire, whichever comes later

Advantages: You’ll continue to enjoy tax-deferred compounding of any investment earnings and receive regular financial account statements and performance reports as long as your money remains in the plan.

Although you will no longer be allowed to contribute to the plan, you may have control over how your money is invested among the plan’s investment options. You also may still be able to obtain information from the professionals who manage and administer your account.

If you’re retiring, you might choose this option if your spouse is still working or if you have other sources of retirement income . Example. Sue, 58, is retiring from her full-time job. Her husband is retiring and the family receives his pension and Social Security benefits, which will cover most of their current living expenses. Sue plans to work part-time at her church after “retirement” and does not expect to need her retirement savings for several more years. After consulting with a tax advisor, Sue decided that keeping her money in the company’s retirement plan may provide her with the greatest flexibility in the future.

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