How much does the average American have in savings?

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Everyone knows that saving money is important — but just because it’s important doesn’t mean it’s easy. According to Red Ventures's annual emergency fund report, only 44% of Americans could pay a $1,000 emergency expense from their savings. More than one-third of adults have more credit card debt than emergency savings. 

Saving can offer a safety net for unexpected expenses and help you reach your long-term goals. But how much should you be saving? Knowing how much the average person has saved can provide a useful benchmark for reviewing your own habits and progress.

Here’s a look at how much the average American has saved by age. Plus, learn practical tips to help boost your savings at any stage of life. 

How much does the average American have saved? 

The typical American household has a median transaction account balance of $8,000, according to the Federal Reserve. Transaction accounts include checking accounts, savings accounts, money market accounts, call accounts, and prepaid debit cards.

However, the average transaction account balance is much higher at $62,410. Why the big difference?

“When we talk about mean and median savings, we're looking at two ways to understand how much money people have saved,” says Walter Russell, president of Russell and Associates, a financial planning firm. “Sometimes, there are a few super-rich [individuals] in a group, which can make the average seem higher than what most people have.”

So, while the mean, or average, gives us a general idea, the median more accurately represents what most people have saved.

It's important to remember that these figures are just benchmarks. Your savings goals should be based on your unique situation, including income, expenses, and future plans.

Average savings by age 

Savings balances tend to increase with age. As you progress through different life stages, your financial priorities and opportunities for saving tend to shift.

“As we go through life, we tend to save more. It's just how it works,” says Russell. “Think about it like a piggy bank getting fuller as you age. Plus, as we get closer to retirement, we usually put more effort into saving up for those golden years.”

Here’s a breakdown of the median savings by age group:

These numbers show that, in general, people tend to save more as they get older. 

Younger adults, who are often just starting their careers and may be burdened with student loan debt, typically have lower savings balances. As people enter their prime earning years and have more disposable income, they can often save more aggressively. Older Americans, who have had more time to accumulate wealth and may have paid off major debts like mortgages, tend to have the highest savings balances.

However, it's never too early (or too late) to start saving. Even if you're in your 20s and just starting, making saving a habit now can pay off big time.

Average savings by income 

Income is another key determinant of savings. Higher earners generally have more disposable income to set aside for the future, while lower earners may struggle to save after covering basic living expenses. 

“The more money you make, the more you can squirrel away for a rainy day,” says Russel. “If you bring in a decent paycheck, you have more wiggle room to tuck some of it into savings.”

Here's a look at the median savings balances by income level:

These stark differences underscore the impact of income on the ability to save. Households making less than $34,599 have a median savings balance of just $900. In contrast, the top earners (those making over $245,500) had a median savings balance over 120 times higher. 

While saving undoubtedly is easier on a higher income, it’s still possible. Even if you can only save a few dollars each week or month, the sooner you start, the sooner you build your nest egg.

Financial habits, such as budgeting, living below one's means, and prioritizing saving, play an important role. Setting up scheduled transfers from checking to savings is one good way to make saving easy. 

Average savings by education 

Education is another factor that can influence savings. Higher education levels 

are often associated with higher earning potential. This can translate into a greater ability to save. 
Here's a breakdown of median savings by education level:

Those with higher levels of education tend to have significantly more money saved than those with less education. The median account balance for someone with a college degree ($23,370) is over 25 times higher than that of someone without a high school diploma ($900).

This disparity can be attributed to several factors. Higher levels of education typically lead to higher-paying jobs, providing more income to set aside for savings. These jobs may come with access to employer-sponsored retirement plans and other financial tools, which can help boost overall savings.

“A good education can increase your financial literacy and career opportunities, allowing you access to resources and networks,” says Russell. “It can also be a catalyst for making sound financial decisions.”

Average savings by race and ethnicity 

Unfortunately, there are disparities in savings balances among different racial and ethnic groups. Here's a look at the median bank account balance by race and ethnicity:

*The SCF’s “other” classification includes those who identified as Asian, Native American, Alaska Native, Native Hawaiian, Pacific Islander, and those with more than one racial identification.

These disparities can be attributed to a number of factors, including income inequality, discrimination, and differences in access to financial education and resources, explains R.J. Weiss, a certified financial planner. 

“While some differences [age, income, and education] are pretty straightforward, other factors, such as race, gender, or marital status, are interesting to know as they highlight wage gaps or other systemic issues that our leaders can improve,” he explains. 

Not everyone has the same opportunities from the start, says Russell.

"Some individuals might face extra hurdles because of their race, like not having access to education or struggling to find a well-paying job," he says. "But here's the thing: these challenges might slow you down, but they don't have to stop you. With determination and the proper support, overcoming these obstacles and building up your savings is possible.”

How much should I have saved? 

Knowing how much the average person has saved can provide useful context. But it's more important to focus on your financial situation and goals. Everyone's circumstances are unique, and there's no one-size-fits-all approach to saving.

That being said, some guidelines can help you assess whether you're on track with your savings. A common rule of thumb is to have an emergency fund with 3-6 months' worth of living expenses saved. This can help you weather job losses, medical emergencies, or other unexpected expenses without falling into debt.

Beyond an emergency fund, your savings goals will depend on factors such as age, retirement plans, and major life milestones like buying a home. Here are some retirement savings benchmarks to aim for at different stages of life. Keep in mind you may need to save more or less depending on your lifestyle, health, and other factors:

• By age 30: At least 1X your annual salary 
• By age 40: 3X your annual salary 
• By age 50: 6X your annual salary 
• By age 60: 8X your annual salary 

So, for example, if your annual salary is $75,000, you should aim to save $75,000 by age 30, $225,000 by age 40, $450,000 by age 50, and $600,000 by age 60. 

It's also important to remember that saving for retirement is just one piece of the puzzle. You may have other savings goals, such as saving for a down payment on a home, building a college fund for your children, or starting a business. The key is prioritizing your goals, creating a plan, and saving as early as possible to take advantage of compound interest.

Tips to boost your savings 

Now that you have a benchmark against which to compare yourself, you can start making a plan to set money aside and build your savings.

First, you’ll need to set some savings goals. Personal finance is, above all else, personal. Consider your unique situation and decide what goals make sense for you.

“Prioritize comparing yourself against your past,” says Weiss. “Know what you have saved, whether in cash or for retirement and make sure this number improves over time.”

Once you’ve set those goals, it’s time to work toward them. Here are some practical tips to get you started:

• Create a budget: Tracking your income and expenses can help you identify areas where you can cut back and redirect more money toward savings. Look for opportunities to reduce discretionary spending on dining out, entertainment, or subscriptions.
• Automate your savings: Set up automatic transfers from your checking account to your savings account each payday. This can help you build savings consistently without having to think about it.
• Take advantage of employer benefits: If your employer offers a 401(k) plan, ensure you contribute enough to take full advantage of any employer match. This is essentially free money that can significantly boost your retirement savings.
• Increase your income: Look for ways to boost your earnings, such as pursuing a promotion, taking on freelance work, or starting a side hustle. The more income you have, the more you can potentially save.
• Reduce debt: High-interest debt, like credit card balances, can be a major drain on your ability to save. Focus on paying down debt as quickly as possible to free up more money for savings and reduce the amount you're paying in interest.

“Focus on building lasting habits,” says Weiss. “Start by looking at your current finances and find small ways to improve. For example, you could raise your 401(k) contribution by 1% or set up a separate savings account to automatically transfer $50 from each paycheck. The goal is to make regular, small improvements, keeping track of your progress over time.”

Frequently asked questions about saving 

The bottom line

Saving money is crucial to financial health, no matter your age or circumstances. By taking proactive steps to save more, you can build a stronger financial foundation and achieve your goals.

Remember, it's never too late (or too early) to start saving. You can secure a brighter financial future by making saving a priority and developing good financial habits. 

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.