According to report According to the Transamerica Retirement Research Center, middle-class people expect diverse sources of retirement income. Below you can find out the average cash, savings, and home equity balances in the United States.
What is your financial situation?
Read on to see how your account and investment type compares to most people’s accounts and investment types. Use the Boldin Retirement Planner to see your current total and further growth projections. Then make adjustments and try different scenarios to maximize your wealth.
Precautions Mean and median: The averages we see below are usually higher than the medians, as very wealthy individuals can inflate the averages. The median reflects the middle value of a set of numbers. Example: The average of 1, 5, and 10 is 5.3. The median value of 1, 5, and 10 is 5.
Total savings
As of late 2023, middle-class retirees report total household savings of $186,000 (estimated median), excluding home equity, according to Transamerica research. Savings increase with household income. Those with household incomes between $50,000 and $99,000 have total savings of $120,000, excluding home equity, compared to those with household incomes between $100,000 and $199,000. have saved $349,000 (estimated median).
cash and cash account
You want to keep money in a cash account for short-term living expenses and emergencies.
Emergency savings for the average household
Emergency savings are needed for unexpected financial hardships such as job loss, medical bills, and medical bills.
Home repairs, car repairs, and other unexpected expenses. Emergency savings could also help people prevent infection
You don’t have to tap into your retirement savings to cover such expenses.
Transamerica suggests that middle-class people have $8,000 (median) in emergency savings.
Most experts recommend having enough emergency cash to cover three to six months of living expenses. Are you in a pinch? Find out why an emergency fund is the cornerstone of financial health.
average household checking account
The FDIC reports that in 2022, 95.5% of U.S. households were “banked,” meaning at least one household member had a checking or savings account with a bank. means. This is the highest percentage since the survey began in 2009. They attribute this change to improved socio-economic conditions.
Latest Survey on consumer finance announced that the average household checking account balance in 2022 is $16,891 and the median household checking account balance is $2,800.
Americans between the ages of 55 and 64 have the highest median checking account balance at $3,500.
Average balance of all cash savings or trading accounts
According to data from the Federal Reserve, the average American has a savings account balance of $8,000. This is the amount of money people have in transaction accounts such as checking, savings, money market, calling accounts, and prepaid debit cards.
The median balances of all trading accounts, including savings by age, are as follows:
- $5,400 if under 35
- $7,500 for ages 35-44
- $8,700 for ages 45-54
- $8,000 for ages 55-64
- $13,400 for ages 65 to 74;
- Median bank account balance for people 75 and older drops to $10,000
Average cash kept at home
Since the good old days of the Y2K panic (and even before that), it was common for people to keep some cash on hand at home. Whether hidden in your mattress or in a coffee can in your freezer, cash can come in handy during a natural disaster when the power grid may be down.
Some experts recommend having about three days worth of cash on hand to get you through a difficult situation. Think carefully about what you will absolutely need in the event of a disaster, and have that amount on hand. However, keeping cash at home means you don’t earn any money and are also at risk of theft and fire.
Recent trends suggest that young people are returning to the cash economy. Many people embrace a practice called cash-stuffing. They take their income in cash and store it in envelopes or jars, one container for each category of expenditure. Once the container runs out, the month is over. Recurring bills are paid through your checking account and credit cards are paid from your credit card’s cash container.
Proponents say it’s a way to control spending, and one online survey found that as many as 61% of adults aged 18 to 41 use cash-stuffing to some degree.
Medical cost savings
Almost three in four middle-class people (74%) save for medical expenses. 59 percent are
I save in personal accounts (savings, checking, brokerage, etc.) and 23% in health savings accounts.
(HSA), 14% save in a Flexible Spending Account (FSA), and 4% save through other means.
The Employee Benefits Institute (ERBI) reports that although HSA glans are on the rise, they remain relatively low.
The year-end balance for 2022 increased to $4,607, but the average balance is still small. This may be a result of the fact that many of the HSAs in EBRI’s HSA database are relatively new. Roughly one-third of accounts were opened in 2021 or later.
Home Equity: 66% of Americans own their home
Home equity can represent a significant portion of a household’s wealth and increases significantly as people age.
The estimated median home equity for middle-class households is $177,000. Housing equity increases with household income. Retirees with household incomes between $50,000 and $99,000 have home equity of $140,000, while households with incomes between $100,000 and $199,000 have home equity of $254,000.
Average home equity by age: According to recent data, census bureauelderly households:
- Home equity for people under 35 is $60,000
- $111,000 for ages 35-44;
- 45-54: $144,000
- $162,000 for ages 55-64
- $300,000 for those 65 and older
Home equity can be an important part of your retirement planning. Retirees can use this funding in a variety of effective ways, the most common being downsizing.
Model these strategies for leveraging your home equity with the Boldin Plan and see the impact on your cash flow, desired retirement lifestyle, and ability to achieve your net worth.
Average retirement savings
Retirement accounts are tax-advantaged accounts that are typically not used until you retire. In most cases, there are hefty tax penalties if you withdraw before age 59 1/2.
According to Transamerica, the median retirement savings for the middle class is $66,000.
According to the latest Federal Reserve Survey of Consumer Finances, the median retirement savings by age are:
- $18,880 if under 35 (average $49,130)
- $45,000 for ages 35-44 (average $141,520)
- $115,000 for ages 45-54 (average $313,200)
- $185,000 for ages 55-64 (average $537,560)
- $2 million for those 65-74 and older (average $609,230)
- $130,000 if you’re 75 or older (average $462,410)
Average IRA balance
Investment Company Research Institute (I.C.I.) reports that 36% of all Americans have an IRA. The majority of these accounts are traditional IRAs rather than Roth IRAs, SEP IRAs, SAR-SEP IRAs, or Simple IRAs.
However, Roth IRAs are growing in popularity. In fact, converting your funds to a Roth IRA can be a smart tax strategy. (Learn more about Roth conversions here…)
Employee Welfare Research Institute (Every) reports:
- The average IRA balance is $123,973.
- However, IRA accounts held for 20 years or more have an average value of $283,200.
Fidelity estimates the average IRA balance to be $116,600.
Average amount held in a 401(k), 403(b), or similar plan
Workplace retirement savings plans have become the way Americans save for retirement.
According to pension rights center45% of all workers participate in a workplace retirement plan. They report that the median retirement account balance for all households in the public and private sectors is $86,900. For households with workers or spouses between the ages of 55 and 65, the median balance is $185,000.
The average balance in defined contribution plans, most of which are 401(k) plans, was $134,128 in 2023, according to Vanguard’s How America Saves 2024 report.
Fidelity’s average 401,000 balances by age are:
- $10,500 for ages 20-29
- $38,400 for ages 30-39
- $93,400 for ages 40-49
- $171,400 for ages 50-59
Your most valuable asset is your plan! Only 18% of Americans do
If you are reading this article, chances are you are doing much better than average. But do you actually have perhaps the most valuable and underutilized asset? Planning? Do you have a written retirement financial plan in place?
However, according to fidelityOnly 18% of Americans have a written retirement plan. And there is significant research that suggests planning is the missing piece to financial success and confidence.
When you retire, you no longer live month-to-month or year-to-year. In retirement, you will be dealing with finite financial resources that you will need to tap into to fund the rest of your life. You really need a plan.
Boldin Retirement Planner makes it easy to create, manage, and track your retirement plan. Best of all, a comprehensive system allows you to make better use of your time, taxes, investments, health care, and more to achieve more wealth, security, and happiness.
