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Skip to main * Pricing * Retirement Solutions 401(K) PLAN COST CALCULATOR SECURE Act 2.0 expanded tax credits. See if you qualify and calculate your plan costs. Calculate Your Costs Retirement Plans 401(k) Get a customizable, affordable 401(k) plan 403(b) Retirement plans for tax-exempt businesses Safe Harbor Pass IRS tests with a safe harbor provision Our Solution Payroll Integrations Reduce manual work with payroll integration Investment Advice Explore our strategic approach to investing Customer Reviews from G2 See why we’re named a leader in the 401(k) software category * Payroll Integrations WE INTEGRATE WITH 400+ LEADING PAYROLLS. Changing the SMB 401(k) experience through seamless payroll integrations. Find Your Payroll Top Payroll Integrations Heartland QuickBooks Online BambooHR Paylocity Rippling Fingercheck Paycor Zenefits Namely Gusto UKG See All * Who We Serve Partners See All Accounting Professionals Lower tax liabilities and grow your firm Benefit Brokers Ensure your clients stay ERISA compliant Financial Advisors Help your SMB clients prepare for their future Banks Improve your offerings and stay competitive Industries Startups Retirement plans that scale with your startup Franchises A customer-focused, cost-effective 401(k) plan Nonprofits Full-service 401(k) or 403(b) retirement plans Restaurants 401(k)s for both your full and part-time employees Customer Stories See All How a safe harbor 401(k) helps Curtis&Co reduce risk and empower employees Sexy Pizza aims to transform the restaurant industry with 401(k) benefits How Kevin Cradock Builders helps construct a bright future for their team * Learn Learning Center See All For Employers Learn more about 401(k) plan administration For Employees How to get the most from retirement planning Retirement Legislation Stay updated on the future of retirement policy Latest Content See All What is a highly compensated employee? Reimagining the definition of retirement: Meet Pretirement. SECURE Act 2.0: Changes to retirement planning (2023) Featured Resources The Human Interest Plan Cost Calculator What is a state-sponsored retirement plan? The ultimate guide to starting a small business 401(k) Talk to SalesLog In * Pricing * Retirement Solutions 401(K) PLAN COST CALCULATOR SECURE Act 2.0 expanded tax credits. See if you qualify and calculate your plan costs. Calculate Your Costs Retirement Plans 401(k) Get a customizable, affordable 401(k) plan 403(b) Retirement plans for tax-exempt businesses Safe Harbor Pass IRS tests with a safe harbor provision Our Solution Payroll Integrations Reduce manual work with payroll integration Investment Advice Explore our strategic approach to investing Customer Reviews from G2 See why we’re named a leader in the 401(k) software category * Payroll Integrations WE INTEGRATE WITH 400+ LEADING PAYROLLS. Changing the SMB 401(k) experience through seamless payroll integrations. Find Your Payroll Top Payroll Integrations Heartland QuickBooks Online BambooHR Paylocity Rippling Fingercheck Paycor Zenefits Namely Gusto UKG See All * Who We Serve Partners See All Accounting Professionals Lower tax liabilities and grow your firm Benefit Brokers Ensure your clients stay ERISA compliant Financial Advisors Help your SMB clients prepare for their future Banks Improve your offerings and stay competitive Industries Startups Retirement plans that scale with your startup Franchises A customer-focused, cost-effective 401(k) plan Nonprofits Full-service 401(k) or 403(b) retirement plans Restaurants 401(k)s for both your full and part-time employees Customer Stories See All How a safe harbor 401(k) helps Curtis&Co reduce risk and empower employees Sexy Pizza aims to transform the restaurant industry with 401(k) benefits How Kevin Cradock Builders helps construct a bright future for their team * Learn Learning Center See All For Employers Learn more about 401(k) plan administration For Employees How to get the most from retirement planning Retirement Legislation Stay updated on the future of retirement policy Latest Content See All What is a highly compensated employee? Reimagining the definition of retirement: Meet Pretirement. SECURE Act 2.0: Changes to retirement planning (2023) Featured Resources The Human Interest Plan Cost Calculator What is a state-sponsored retirement plan? The ultimate guide to starting a small business 401(k) Get startedLog In Learn For employees Retirement planning Articles Table of contents * Savings Overview * Retirement Savings * Emergency Savings * Some Savings Tips * Keeping Average Savings in Perspective * Unmet Savings Goals AVERAGE RETIREMENT SAVINGS LAST REVIEWED May 02 2020 8 MIN READ By The Human Interest Team THE HUMAN INTEREST TEAM We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers. Editorial Policy Table of contents * Savings Overview * Retirement Savings * Emergency Savings * Some Savings Tips * Keeping Average Savings in Perspective * Unmet Savings Goals Nearly half of U.S. households are without any retirement savings — no IRAs, no 401(k)s, nothing at all. The Government Accountability Office (GAO) reports that almost 29% of households 55 and older have neither a pension or retirement savings, which is a scary picture for sure. Having adequate savings for retirement should be a critical financial goal, with your nest egg ideally following a steady upward trend over time. SAVINGS OVERVIEW When planning and saving, it’s important to recognize the difference between retirement and emergency savings. Both are important and have their own set of recommended guidelines to follow. RETIREMENT SAVINGS According to estimates from The Employee Benefit Research Institute, Americans have a retirement savings deficit of $4.3 trillion. This means U.S. households, many with the head of household between 25 and 64 years old, have $4.4 trillion less in savings than is recommended for retirement. When determining how much you should have saved for your retirement, it’s essential to understand which age group you’re in. Generation Years Born Average 401(k) Account Balance in 2019 Millennials 1981-1997 $137,300 Gen X 1965-1980 $281,000 Baby Boomers 1946-1964 $366,100 The average 401(k) account balance rose 351% to $306,500, up from $68,000 a decade prior. Meanwhile, an October 2017 Center for Retirement Research study showed the following median retirement account balances for both IRAs and 401(k)s: Age Range Median Retirement Account Balance in 2017 $37,000 35-44 $80,000 45-54 $104,000 55-64 Ideally, you should aim for the level of savings held by the top 10% of retirement savers, with more than $1 million in average retirement savings between the ages of 65 and 69. However, some experts are now suggesting that retirees may need roughly $3 million to fund their retirement. EMERGENCY SAVINGS Experts recommend that you have a minimum of three months, and preferably six months, of living expenses in an emergency savings fund. This amount is determined by multiplying your budget by the desired number of months and removing luxuries until just must-pay bills are left. These amounts often range between $3,400 per month for earners in their 30s and $4,300 per month for earners in their 40s. SOME SAVINGS TIPS These numbers may seem intimidating, but it’s important to note that contributions to the majority of retirement savings accounts aren’t taxed until the funds are taken out, presumably when the account owners fall into lower tax brackets. Consider establishing automatic deposits into retirement savings accounts. This makes consistently setting money aside easier with the theory being if you don’t see the money, you won’t miss the money. This helps you grow your savings while adjusting to living on the money left over. Other tips for saving for retirement include: * Make a savings plan. This is a roadmap for how you will get where you want to go. How much do you want your investment portfolio to grow this next year? If you’re still working, how large do you hope your retirement savings account will be by the time you retire? When do you plan on stopping working? What’s your risk tolerance level? What kind of investments will help you reach your goal? * Determine how much is enough. Most experts suggest saving 15% of your gross income each year. This includes any company match available. * Determine where your money is going. If you’re struggling to find 15% in your budget to save, take time to figure out where your money is going. Create a detailed, written spending log and identify how you’re spending your money. Once you see where your money is going, you can determine which expenditures are essential and which are discretionary. You can then work on minimizing discretionary spending. * Determine how to boost your savings. If you are currently saving 7%, you likely won’t be able to jump to 15% in just one year, even with creative budgeting. While you should always be contributing enough to receive the maximum of any company match, most experts suggest increasing savings by 1% each year until you reach your desired level. KEEPING AVERAGE SAVINGS IN PERSPECTIVE If you feel your retirement savings are below average for your age group, it’s important to review your current plan and decide the best way to get back on track. Increase your elective salary deferrals to ensure you’re receiving the full matching contribution from your employer, and use an IRA if you aren’t eligible or don’t have access to an employer-sponsored 401(k). It’s also important to be realistic about your retirement timeline. If you have less saved than you want, you may need to think about remaining at your full-time job longer or pick up a part-time job once you retire. Take time to calculate how much you’ll need to retire and then look at how much you already have saved. This will help you determine how much you need to reach your goal and help you develop a plan to do so. UNMET SAVINGS GOALS Average retirement savings aren’t the only place Americans are lacking. Although the average net worth of U.S. households has consistently risen since the Great Recession, it’s still lower than recommended. The Federal Reserve reported in 2016 that the median household net worth is $59,800 for heads of households between the ages of 35 and 44, $124,200 between the ages of 45 and 54, and $187,300 between the ages of 55 and 64. The average median net worth for all age groups increased by 16% from the previous 2013 survey. For many retired Americans, Social Security benefits are their sole source of income, even though that was never the intent of this program. Many retired workers receive a monthly Social Security benefit averaging around $1,500 — about the same as a minimum-wage job. When you add the increasing debt levels that older Americans are experiencing, you have a situation that’s far from living the retirement dream of leisure and travel. Understanding the recommended average retirement savings and median retirement savings by age are important components to preparing for retirement. Let Human Interest’s retirement savings experts help you determine how much you should have saved for retirement and how to get you there. Article By The Human Interest Team We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers. SUBSCRIBE TO OUR RETIREMENT ROADMAP NEWSLETTER Retirement isn’t just a destination. It’s a journey, and we’re here to help you. Our newsletter delivers succinct and timely tips, reviewed by Financial Advisors, to help you navigate the path to financial independence. Email Address * Subscribe By providing your email above or subscribing to our newsletter, you agree to our Privacy Policy. You also elect to receive communications from Human Interest. LET'S TALK. 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For more information on our investment advisory services, please visit https://www.humaninterest.com/hia/. This content has been prepared for informational purposes only, and should not be construed as tax, legal, or individualized investment advice. Human Interest Advisors LLC does not provide tax or legal advice. Consult an appropriate professional regarding your situation. The views expressed are subject to change. In the event third-party data and/or statistics are used, they have been obtained from sources believed to be reliable; however, we cannot guarantee their accuracy or completeness. Investing involves risk, including risk of loss. Past performance does not guarantee future results.