Average Retirement Balance for 60s

[RetireBy90]

Just skimmed an article on Motly Fool at https://www.fool.com/retirement/202...hoo-host&utm_medium=feed&utm_campaign=article



I know it is a skag site, but found this interesting

This especially holds true for savers in their 60s. The median retirement plan balance at the end of 2020 for 60-somethings was $596,992, which means that despite the pandemic, a lot of near-retirees are actually in a pretty good place to wrap up their careers.

Sounds like 60 year old in general are much better than I had been reading. Recently I had read how numbers were much lower.

 

[Andre1969]

Yeah, I caught that article, too, and my first thought was, what's all the doom and gloom been about? But, this quote from it might give some insight...

"Now to be clear, this figure is based on a single survey of people who currently have a retirement plan. But it's encouraging to see that near-retirees are doing reasonably well as far as their savings balances go, at least according to Personal Capital data."

I wonder how many people in their 60's have nothing saved up in retirement, at all? And then, what about people who have more than one retirement account? I'm guessing they're just basing this number off of separate account totals, rather than combining the totals, as needed, for those with multiple accounts. So, that could make the true median number even higher.

Still, that ~$600K number seems a lot more optimistic than I would have thought.

 

[DrRoy]

Perhaps the numbers you had been seeing were for people of all ages, not 60 somethings.

 

[RetireBy90]

Yeah, I caught that article, too, and my first thought was, what's all the doom and gloom been about? But, this quote from it might give some insight...

"Now to be clear, this figure is based on a single survey of people who currently have a retirement plan. But it's encouraging to see that near-retirees are doing reasonably well as far as their savings balances go, at least according to Personal Capital data."

I wonder how many people in their 60's have nothing saved up in retirement, at all? And then, what about people who have more than one retirement account? I'm guessing they're just basing this number off of separate account totals, rather than combining the totals, as needed, for those with multiple accounts. So, that could make the true median number even higher.

Still, that ~$600K number seems a lot more optimistic than I would have thought.

My thoughts exactly. While these numbers are just one survey and the article doesn't have lots of details I was surprised after all the stories I have read about such low account balances. Interesting to note that they credit the market performance over last year for much of the gains.

 

[latexman]

I've seen these articles several times. IIRC, the 60's median is usually about $200k and the average, skewed by the 1%, is about $600k.

 

[qwerty3656]

Yeah - I don't believe that number, unless every other article out there is wrong.

 

[MRG]

Yeah, I caught that article, too, and my first thought was, what's all the doom and gloom been about? But, this quote from it might give some insight...

"Now to be clear, this figure is based on a single survey of people who currently have a retirement plan. But it's encouraging to see that near-retirees are doing reasonably well as far as their savings balances go, at least according to Personal Capital data."

I wonder how many people in their 60's have nothing saved up in retirement, at all? And then, what about people who have more than one retirement account? I'm guessing they're just basing this number off of separate account totals, rather than combining the totals, as needed, for those with multiple accounts. So, that could make the true median number even higher.

Still, that ~$600K number seems a lot more optimistic than I would have thought.

The people who had nothing were not counted because they didn't qualify for the question. The data were not aggregated to get real totals for people who had multiple providers or accounts. The providers don't share data. I worked on a multiple projects that tried combining multiple accounts for a providers data. There wasn't a way to programmatically match and guarentee the results. If you wanted to establish that relationship it has to be done at account setup not after.

Bottom line, the data are wrong.

 

[Andre1969]

The people who had nothing were not counted because they didn't qualify for the question. The data were not aggregated to get real totals for people who had multiple providers or accounts. The providers don't share data. I worked on a multiple projects that tried combining multiple accounts for a providers data. There wasn't a way to programmatically match and guarentee the results. If you wanted to establish that relationship it has to be done at account setup not after.

Bottom line, the data are wrong.

Thanks, that's about what I figured. Personally, I have seven different retirement accounts with four different companies. I've always seriously doubted that Fidelity knows what I have in my Schwab account, or vice versa.

Similarly, I'd imagine those "what percent net worth am I" calculators probably aren't very accurate. For instance, here's a breakdown on the data behind one of those calculators. https://dqydj.com/average-median-top-net-worth-percentiles-by-age/

A whopping ~5800 respondents, to represent the entire country. I mean, it's a start, at least. But I have a feeling it's pretty inaccurate.

 

[Finance Dave]

I've seen these articles several times. IIRC, the 60's median is usually about $200k and the average, skewed by the 1%, is about $600k.

https://dqydj.com/retirement-savings-by-age/

This shows an average of $221k for 60-64, and a median of $2,000.

But, they have two different definitions of savings...one being only retirement accounts and the other more inclusive.

 

[deserat]

@latexman and Finance Dave...thanks for posting that link-excellent info and I like that the author carefully defined his terms. As can be seen there are large swings in the amounts reported did to the underlying definitions.

 

[USGrant1962]

The original survey was by Personal Capital and:

• It is median - the 1% doesn't matter
• It is only people with retirement accounts - the zeros are not included
• It is a combination of Personal Capital (an aggregator) data and a survey - so presumably is aggregated accounts
• It includes lots of interesting questions and data about finances and the pandemic

https://www.personalcapital.com/blog/whitepapers/retirement-realities/

 

[calmloki]

After my SS monthly payment (started at age 62) has the health and drug insurance taken out a robust $91.30 gets deposited in the checking account for me to blow on hookers and Chivas and cat food. Suffice to say, working on our rentals making lots of IRS defined unearned income free of SS resulted in a low monthly SS check in return. Fair deal, just have to count more on our savings to live on while (when?) retired vs. normal savings+SS check people. My saving are, then, necessarily higher than a regular wage earners. Looking at the maximum SS payment available and the median savings reported here makes me think we overshot our savings. Guess I'm a pessimist.

 

[Bamaman]

The average 401(k) savings balance is just over $100,000, but the median account balance is much less at $25,775--according to Vanguard.

That tells me the vast, vast majority of the U.S. population has simply not saved for their future. And they're going to find living on Social Security only is going to be extremely difficult.

Their millennial children are living in their basement now. Maybe the children will allow the parents to live in their basement--whenever they have one.

 

[skyking1]

you say that like it is a bad thing. Mom sold her house to my sister, who kept staying in the other end of the house and mom was able to live out her days in her house in her bedroom.

 

[LarryMelman]

For any of these surveys, you have to ask "how did they get their data?"

If a poll taker called Fidelity and asked to know my 401k balance, firstly I hope Fidelity would tell them to go pound sand. But the answer would be about $30K. But I've only been in this job for about a year. Fidelity doesn't know about the 6 previous 401k's that I've had, all of which I rolled over into IRA accounts. Schwab has most of that money and Fidelity has the rest. Even if my IRA balances were also given to the poll taker, they had better not be personally identifiable so that they could figure out the overall total.

Nor does it include my taxable investments in several accounts which when combined, add up to about double the sum of my tax-deferred accounts.

My situation may or may not be typical, but it's why I don't give any credibility to articles that claim to know these things.

 

[5Miler]

I'm also in the camp of those questioning the validity of the 401K balance numbers as an indication of financial preparedness. I have zero dollars in a 401K as over the years I had several employers so I consolidated all of my 401K accounts into a single rollover IRA with Vanguard. Many of the 401K plans had extremely limited investment choices which I couldn't wait to dump anyhow. Also I have a ROTH account in six figures which doesn't enter into their equation.

So, going with Fidelity's yardstick I am not on the map for readiness to retire as I enter my 10th year of goofing off.

DGF does have a 401K at Fidelity that has crossed the seven figure marker. She also has a similar amount combined in her ROTH, Rollover IRA and taxable brokerage account. Fidelity is only giving her half credit.

 

[Gumby]

This is from 2017, but I bet it is more accurate and more useful.
https://www.census.gov/data/tables/2017/demo/wealth/wealth-asset-ownership.html

Interpolating, the median retirement savings for people 55-69 was about $137k. Median net worth, excluding house, was about $81k.

 

[street]

The people who had nothing were not counted because they didn't qualify for the question. The data were not aggregated to get real totals for people who had multiple providers or accounts. The providers don't share data. I worked on a multiple projects that tried combining multiple accounts for a providers data. There wasn't a way to programmatically match and guarentee the results. If you wanted to establish that relationship it has to be done at account setup not after.

Bottom line, the data are wrong.

Just a question. So, what you and others are say is, that average retirement balances for 60's year old are more then what the article indicates?

Just wondering it think it's higher or lower then those numbers?

 

[karen1972]

Given 35% of Americans work for a company that doesn't offer a 401k plan, that data is pretty skewed. So yes among Americans that have a job that affords them a 401k, they are doing pretty good.

 

[npage]

The most interesting thing about articles like this to me is that the numbers are a lot lower even at the high end than numbers posted in places like this. People here and other forums, chat groups of this nature with 5 times a "normal" person might say they are comfortable with a 5% withdrawal rate and get taken behind the shed. Or god forbid your spreadsheet does not have 100% certainty if you live to 110.

Clearly the vast majority of non thinkers like me and others here make do on far less. Not attacking anything here, just an interesting juxtaposition.