How do you compare with your retirement savings?

by J. Money -

pretty pebbles

TD Ameritrade just came out with their “Road to Retirement” report, and it’s always fun to compare and see how we’re doing against others ;)

In this case, 2,000 others who are 40 and older with at least $25,000 or more in their accounts for some reason… Maybe since they’re still stuck on “traditional” retirement?

So if you’re a millennial (or even better – a Gen Z’er!) and rank in any of these levels outside the first one, place your hand here as you’re already beating out a good portion of those in their 40s all the way up through their 70s – eek!

Here’s the breakdown from CNBC where I first caught this survey from:

How much Americans have saved for retirement at different ages

Age 40-49:

  • 41% have less than $50,000 saved
  • 18% have $50,000 to $99,000 saved
  • 27% have $100,000 to $500,000 saved
  • 7% have $500,000 to $999,000 saved <– Me
  • 7% have $1 million or more saved

Age 50-59:

  • 37% have less than $50,000 saved
  • 16% have $50,000 to $99,000 saved
  • 32% have $100,000 to $500,000 saved
  • 6% have $500,000 to $999,000 saved
  • 8% have $1 million or more saved

Age 60-69:

  • 28% have less than $50,000 saved
  • 10% have $50,000 to $99,000 saved
  • 36% have $100,000 to $500,000 saved
  • 14% have $500,000 to $999,000 saved
  • 12% have $1 million or more saved

Age 70-79:

  • 20% have less than $50,000 saved
  • 13% have $50,000 to $99,000 saved
  • 36% have $100,000 to $500,000 saved
  • 19% have $500,000 to $999,000 saved
  • 12% have $1 million or more saved

Find where you stand? How are you feeling about it?

Remember – these #’s are for *retirement funds* only, and not other assets or savings/investments people probably have (or hopefully have!). And of course, it doesn’t really matter where you land on this, just that you’re *happy* about it or at least working towards *improving* your situation if you’re not…

Sometimes it’s helpful to just have a frame of reference to wrap things around :)

Here were some other nuggets from the survey I found interesting as well:

  • Most Americans hope to retire by age 67, and more than half have a plan to do so. Or 47 if you’re a regular reader of Budgets Are Sexy! ;)
  • 1 in 10 of those in their 40s also say new political leaders influenced their retirement plan. Not here… Their antics affect things of course, but a majority of our well being is well within our control.
  • 81% are shifting their financial strategy to prepare for a longer lifespan. Probably smart as we’re all living longer!! A great problem to have! :)
  • 401(k)s are the most popular retirement vehicle, especially for younger groups. I believe it – that *matching* is no joke!! You could even go on to become a 401(k) Millionaire! (*gasp*)
  • Nearly half of those in their 40s have already withdrawn from their retirement accounts. Now that’s sad :( I hope hard it’s just a technicality of TRANSFERRING their money into another retirement vehicle like an IRA which is popular to do when leaving employers, but cashing them out just breaks my achy budgety heart… They better be for true emergencies!
  • Meanwhile, only 1 in 3 over 50+ are taking advantage of catch-up contribution. That actually surprises me, but in a good way! 1/3 is a pretty decent chunk!
  • A majority of Americans would give themselves a C grade or lower on their retirement savings. At least no one’s kidding themselves :(
  • 28% of those who are retired say they felt pressure to retire (e.g., from employer, family or social norms) Ughh!!! Let everyone live their lives!! Everyone knows there’s only one way to truly retire anyways – the FIRE way!! Everyone else is WRONG….
    ……….
    ……..
    ……
    …..
    ….

    ..
    .
    .
    .
    .
    ..
    … WRONG, I say!

Here’s the full report if you want to nerd out more: Road to Retirement Survey (PDF)

Happy retiring,

j. money signature

{ 46 comments… read them below or add one }

1 FI for the People January 28, 2020 at 5:49 am

Thanks for sharing, J. Gen Xr looking good here! Sad to see how many folks are ill prepared. I wonder how many people will be involuntarily retired well before they actually want to retire.

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2 J. Money January 28, 2020 at 6:01 am

I don’t want to know the answer to that :(

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3 SWFL Financial Coaching January 28, 2020 at 7:04 am

People know they are in trouble when it comes to retirement saving, but they aren’t doing anything about it. It’s not that they can’t, because we all know people can live on a lot less then they make. I do think the people who are in their 60s and older are mostly ok because they can rely on social security and have some pensions. They don’t need any many assets as the younger people will.

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4 J. Money January 28, 2020 at 9:25 am

Hopefully they get lucky and stumble across $$$ blogs like we did! I shutter to think what my life/wallet would be like if I hadn’t… completely transformed me.

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5 Debt Free in RVA January 28, 2020 at 10:01 am

So, here is an honest question for my fellow commentators.

When I meet with my retirement counselor (my company provides one) they insist that I need AT LEAST 70 to 80 % of my income when I retire.

OK, I DO NOT BUY IT. My wife and I have calculated our expenses and we can easily live on $ 2,000 a month, which is $ 24,000 a year. This is only about 15 % of what we make each year.

So, why do we keep getting pressured that we need 70 % !! I just don’t get it. We are very frugal, AND like being frugal :-)

Can someone explain *why* to me please?

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6 Chadnudj January 28, 2020 at 10:19 am

I presume that the 70-80% number is the result of studying average people and their pre-retirement/post-retirement spending. Since the “average” person might be saving 10-20% for retirement, when they retire and no longer need to be saving that amount (or spending the other costs of going to work, like work clothes/commuter costs/lunches out, etc.), it means that their income need when they retire is cut to 70-80% of their working income.

If you’re not average, don’t let “averages” define you or your plans.

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7 Debt Free in RVA January 28, 2020 at 10:28 am

Thanks for the reply and explanation!

I wonder if that is how much the average person spends. Also, based on what J posted above I sure wonder if people can afford to spend 70 % to 80 % of pre-retirement income in retirement.

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8 Gene Roberts January 28, 2020 at 11:29 am

The 70-80% rule of thumb is a STARTING point for the average Joe on the street to BEGIN planning on HIS OWN.

If a retirement planner working directly with me (one-on-one) pulled out that weak-ass generalization instead of working up an actual retirement budget with me, I would thank him for wasting both of our times and walk out.

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9 J. Money January 28, 2020 at 12:53 pm

Yeah – def. not giving *personal* advice here… Which is supposed to be the point of connecting with an advisor! To help YOUR situation specifically! #Lame

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10 SWFL Financial Coaching January 28, 2020 at 11:22 am

I think it’s because the 20-30% that you don’t need is taxes and work related expenses which you won’t have (at least not all the taxes), and they assume everyone spends everything else.

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11 Nate January 28, 2020 at 8:14 am

I’m off to a very good start based on my average peers, however compared to most of the FIRE crowd I’m pretty far behind. Basically just put in enough to get the company match from age 22-34 (which is way better than nothing!) and have only been really seriously saving for 3-4 years now (and even then “only” 25% or so). No retiring younger than 55 for me unless that rich, childless aunt of mine has a lot more money than it seems like she does and leaves me a big chunk of it! But I should be on pace to retire sometime between 55 and 60 if I’m able to continue increasing my investments every year and get average returns. Maybe sooner if I can accelerate my income growth somewhere along the line. I don’t think that’s too bad in the grand scheme of things.

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12 J. Money January 28, 2020 at 9:28 am

Def. not… And much more fun to compare yourself to the “average” person than the FIRE crowd haha… You know it’s bad when saving 25% doesn’t even get you a “good job” :)

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13 MK January 28, 2020 at 8:19 am

I am one of the 32% in my age bracket. I feel my retirement nest egg could be better. I have taken action by increasing my 401k contribution & fully funding my Roth. My mother is currently 96 and still going strong (her mother lived to 95) so the potential length of my retirement scares the heck out of me. If I look at total net worth, I move up to the next bracket which I feel much better about.

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14 J. Money January 28, 2020 at 9:33 am

Holy super women!! What are you guys eating over there???! :

But yeah – TOTAL net worth is def. more appropriate to be concentrating on than just retirement funds :) We all have our own ways of investing and stashing our money!! Retirement funds are just one avenue for it…

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15 Adam January 28, 2020 at 9:24 am

No fair — I just got into the 40-49 age bracket five days ago. This thing is RIGGED!

By myself I’m sitting right on a cool quarter mil and as a household we project finishing out the year close to $500k, unless the market blinks. Man, it’s depressing to think how much my cohort needs to do to catch up.

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16 J. Money January 28, 2020 at 9:34 am

you just have to be a few weeks younger than me, don’t you? ;)

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17 Adam January 28, 2020 at 1:21 pm

Hey man, I don’t make the rules! :D

My childhood best friend is five days older than I am. This year it was particularly amusing to pester him about his age.

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18 J. Money January 28, 2020 at 2:47 pm

Haha.. nice…

My wife LOVES still being in her 30s though she’s not that far behind me ;)

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19 Francis January 28, 2020 at 9:26 am

Comparison is the death of joy.
My own net worth and cash flow tracking are all that mattered when I was pursuing FI.

Benchmarking articles that compare age demographics and retirement savings is just another lever that the retirement industry machine puls to keep their meat hooks in your lunch.
To counter this we all need to stay focused on Financial Independence first rather than retirement. There is a difference.

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20 J. Money January 28, 2020 at 9:37 am

True true, but the more people are out there *talking* about retirement/investing the better too, so I’m okay with it… Much better than the other garbage people consume on the daily.

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21 Moneybee January 28, 2020 at 9:28 am

My parents are top-tier! Retirement account millionaires! ’cause they’re AWESOME! (If people can brag about their kids, I can brag about my parents.) I imagine as long as Dad has his current job he’ll keep working, because he generally likes it, and my mom’s already sorta retired with all her kids out of college (Her dream job legitimately was stay-at-home mom. And she’s still the ‘house manager’ and darn good at it.) but if Dad no longer had that job, he might just retire. I think he’d be able to.
As for me, I started too late to be impressive. That is, I started with like $400 a month at 25.5, which is hardly *failing*, but it’s also not starting right out of college (and far from maxing right out of college!).

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22 J. Money January 28, 2020 at 9:38 am

Def. better than I was at that point! I didn’t start really paying attention to my *late* 20s… and even then still enjoyed blowing a good portion on the important stuff like booze :)

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23 Chris ODonnell January 28, 2020 at 9:38 am

7% aged 40-49 have $500K to $1 million saved.
6% aged 50-59 have $500K to $1 million saved.

Wut? Given the market for the last 10 years, how can that be true? Are that many people raiding their retirement savings to pay for their kids’ college?

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24 Lisa January 28, 2020 at 10:47 am

Actually, many of us survived on $10,000/year with kids, mortgage, and no idea how to handle money back then. I’m pretty proud of us that we finally have jobs we can save at, have a pension and can actually retire from. At age 50-59 I’m in the bottom part of the list but know I’m doing damn good! And no, my kids paid for college themselves. I went back in my my 40’s myself, thank you very much.

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25 J. Money January 28, 2020 at 12:57 pm

$10k – wow! That’s pretty bad ass.

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26 Fritz @ TheRetirementManifesto January 28, 2020 at 10:25 am

Thanks for the shoutout on my “401k Millionaire” guest post – the gift that keeps on giving!

I found the “advice they’d give their younger selves” interesting, may build a post around that slide (with a shoutout to you, of course!). Great survey, thanks for sharing.

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27 J. Money January 28, 2020 at 12:55 pm

I hope you do, sir! Always something interesting floating around the ‘net :)

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28 Chadnudj January 28, 2020 at 10:30 am

I should probably read the study to figure this out, but is this on a per-person basis or household (i.e. total for a married couple basis)?

I guess it doesn’t really matter — my wife and I are each separately or combined together in the 27% in the 40-49 bracket with $100k-500k, although we’re relatively close to breaking out of that band and we are just entering that age bracket (I’m there, she’s almost there). We’re both maxing out work 401ks (no Roths…it’s on the list to do, but first I need to roll our IRAs into our 401ks so that we can backdoor, which is a project for February) and get decent matches (3% of salary for each).

Admittedly cash flow is tight due to daycare for 2 kids (thankfully one is starting kindergarten in the fall), 2 car loan payments (one will be done April 2021 on current path), new house start-up costs, and student loans (low interest, so not being too aggressive paying them off), so the maxing out 401ks is a squeeze. I should (hopefully?) be getting a bonus at some point this year (got one in July last year) which will hopefully lighten the load, we’re both hopeful for raises (I’m frankly overdue for one just to keep up with inflation; wife regularly gets one), and our cash flow will improve with raises/as debt falls off/kids get away from full time daycare/as we have less one-time large expenses now that we’re more or less settled into our new house.

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29 J. Money January 28, 2020 at 12:59 pm

Oh man, you guys are gonna be sitting SO PRETTY once all the kids are out of daycare!! We were paying $25,000-$30,000 a year until ours got into public school and now down to just 1 left… Hang in there! :)

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30 Lisa January 28, 2020 at 10:33 am

To Debt Free in RVA,

The reason financial advisers say people need 70% of their pre retirement income is they have not paid off their home, may have to pay for things like hearing aids or medicine not covered by Medicare/Medicaid,
and want to take long delayed vacations.

If people started saving $300 a month in their 20s, they too can be a millionaire by the time they want to retire. Unfortunately, personal finance is not well taught in schools.

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31 w8jcd January 28, 2020 at 10:40 am

What if you’re age 30-39? Are you not allowed to read this blog?

As an attempt to contribute value to this blog after taking it away with the comment above, I went to this website to research the histogram for age group 35-39 (I am 39). https://dqydj.com/net-worth-by-age-calculator-united-states/ The data source is different so results may vary. This data here is from 2016 so be aware of that, too.

Less than 50k: 54%
50 to 100k: 14%
100 to 500k: 25%
500k to 1M: 3%
More than 1M: 4% <- That's me

I wonder what the difference is between "net worth" and "saved for retirement." The latter is a CNBC survey question, so it can mean anything. It might be similar to net worth excluding home equity. The data above is net worth; you can access net worth excluding home equity at the website above as well.

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32 J. Money January 28, 2020 at 1:02 pm

Looking good over there!!

Thanks for adding in this section for everyone else ;)

Net worth typically includes cash, brokerages, real estate, businesses, etc, while “retirement” is only retirement accounts like 401k, IRA, etc. So this poll def. leaves out a lot, though it’s probably the bulk of many peoples’ net worth.

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33 JoeTaxpayer January 29, 2020 at 4:04 am

@w8jcd –

I like that site for a few reasons. One is that the chart will let you hover and see each percentile. So for Age 60-64, I can see that $1M is the 84th (or top 16) percentile. It would take $1.64M to get to top 10%, and top 5%, $3.69M. (And of course, the good recent few years will have pushed these numbers up a bit).

This really brings me back to the Suze tirade over the FIRE movement. I suppose it’s easy for celebs to forget what living on a budget was like, and that one doesn’t actually need $10M to just start to feel comfortable.

Above, DF/RVA cites people that insist on a rule of thumb. A rule based on averages. Who aspires to be average? When my wife and I had our child, I recall looking at the numbers. From gross income, 20% (between Fed/FICA/State) went to taxes. 20% to the Mortgage. 20% to the Nanny, 5% to college fund, and 20% to retirement savings. At that moment, I recall thinking that we were literally living on 15% of our gross income, and all else being equal, our retirement “number” would be nowhere near that 70-80%.

I blinked, the kid is now a junior in college, I retired at 50 (7 yrs ago) and the actual budget is about 60% of that number from 20 years ago. As the 2 decades passed, the future budget got more clear, and the only thing I wasn’t thinking about early on was health insurance. For those trying to FIRE, it’s a big hurdle. For the 3 of us, the annual cost, even on a company retiree plan, is $20K/yr. FWIW, the 4% rule? I’m ok with spending just above that. My wife’s social security will kick in 6 yrs from now, and is about 1/4 our current spending. At the same time, both our medical will be Medicare and a good portion of that $20K will be saved. Last, the mortgage will be done. Better to enjoy it now, there’s no taking it with you.

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34 J. Money January 29, 2020 at 5:50 am

You’re an inspiration, sir!! Don’t have too much fun there in retirement! ;)

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35 Gene Roberts January 28, 2020 at 11:15 am

“7% Age 40-49: have $500,000 to $999,000 saved” => Me too.
I optimistically anticipate reaching 1 mil in retirement savings @ age 52 (3 years away).
I am feeling very good about my plan to retire @55.
Given that this study takes out all data for <40 age and <$25k in accounts, the amounts people have saved are REALLY dismal. My guess is that half of the country should get straight-up "F's" on their retirement grade.

"Meanwhile, only 1 in 3 over 50+ are taking advantage of catch-up contribution."
– This one is fairly understandable. It assumes that you are already maxed out at normal contribution levels, a feat in itself. I've only managed it for the last 2 years.
– I will turn 50 this year and maxing out 401k, Roth IRA, and HSA (with the catch-up increases in 401k and IRA) is going to be challenging (but is my goal). It will bring my overall savings ratio to about 46%.

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36 J. Money January 28, 2020 at 1:04 pm

A baller at 50 too it looks like! I want an email when you complete it, man!

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37 Gene Roberts January 28, 2020 at 5:10 pm

Sure thing. But look for that email around Christmas time. (as in, it WILL take me ALL year) :)

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38 J. Money January 29, 2020 at 5:45 am

I can be patient for fun things :)

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39 Revanche @ A Gai Shan Life January 28, 2020 at 11:53 am

Is that bracket for both of you, or just half of your savings for each of you?

I count all our investments as retirement since they’re all INTENDED for retirement, and I don’t have a retirement plan through my employer but we’d be in a lower bracket if it was per individual.

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40 J. Money January 28, 2020 at 1:10 pm

Technically it’s for both of us since all money is *our* money, but in either case we’d still fall in the same section :) a bulk of it comes from all my hustling the past decade while she was in grad school and helping raise our 3 wee ones.

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41 Liz January 28, 2020 at 12:42 pm

I’m guessing this is looking at people as individuals. I’m 31 with 37,000 in my Roth my husband’s 34 with 64,000 together we just hit over the 100k mark. I think we are on a good track now saving 13,800 a year plus my husband will get atleast 2,500 when he retires at 42 from the military. Our goal is to have our house paid off in 7.5 years. Then freedom to choose what we will do every day.

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42 J. Money January 28, 2020 at 1:12 pm

Yaaasss!! So much freedom awaiting you! I bet you get it paid off in 6 years :)

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43 Anne January 28, 2020 at 9:57 pm

Just turned 38 and we are solidly in the “$500,000 to $999,000 saved” bucket.

And sadly I have way too many peers that have taken money out of their 401k for vacations!

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44 J. Money January 29, 2020 at 5:46 am

Ack- stop!

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45 Beth January 30, 2020 at 12:14 pm

Question:

How do you estimate where you are when you have a pension? I have a 403b too, but will also have a very decent pension that I am fully vested in and can start taking at age 55 (though, I get a larger sum the longer I wait to start taking payments). So, while my 403B is decently funded, it is not has high as others I know that have no pension to draw from as well…

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46 Mike S January 30, 2020 at 3:17 pm

Beth,
I have a military pension and I use the 4% rule to give it a value. What amount of cash at 4% interest would equal my monthly pension. $500/mo would be valued at (500*12)/.04=$150,000.00.

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