Editor’s Note: This story originally appeared on SmartAsset.com.
If you have enough money, it’s important to set aside some sort of savings for both short and long term goals.
After you’ve covered general expenses from your daily or monthly budget, an emergency fund could help you prepare for short-term expenses like medical, auto, travel, and other unexpected expenses.
Long-term savings can, of course, be used for less urgent things like planning a future vacation, buying a car or house, and retiring. A financial advisor could help you create a financial plan for these goals.
Let’s take a look at how your savings compare to the average savings by age group in 2021.
Savings recommendations compared to reality
The first thing to remember when thinking about saving is that the ability to save is a very important factor. While the typical recommendation is to be worth three to six months, many Americans just don’t have the ability to walk away that much.
The recommendations can give you a good idea of a rough number, but the reality for each person or household will not be like the others in any way.
Situations may vary depending on individual factors (a life event or an adjustment in one’s daily needs) and / or on a large scale (such as national or world events).
Savings by age group
Just as spending varies widely by generation and age group, so does the average savings figure. The data below is based on the Federal Reserve’s 2019 Survey of Consumer Finances, and the numbers refer to what the survey calls “transaction accounts”.
Here is the average savings account balance by age:
- 35 and under: $ 11,200
- 35 – 44: $ 27,900
- 45 – 54: $ 48,200
- 55 – 64: $ 57,800
- 65 and over: $ 60,400
The younger and older age groups will of course have the most variation within them. The younger cohort, after all, includes minors who are unlikely to have much savings, and the older cohort includes retirees who work to save.
An important habit to remember is to create an emergency fund, perhaps starting at a younger age and saving as much as possible before other responsibilities and expenses (like rent and insurance) start to roll in. get in the game.
When thinking about saving for longer-term financial goals, such as retirement, the average amounts also vary by age group.
According to data from the Federal Reserve report, retirement savings increase with each age bracket and can often become more aggressive as the traditional retirement age approaches (when it might also be time to retire). think about catch-up contributions on an account).
Average savings sometimes decline over time after age 65.
Several sources of income can help you save
If you have the capacity, there are plenty of ways to put money aside for an emergency fund or other savings account – and it’s never too late.
Depending on schedules and capacities, a variety of other sources of income may be available to you. These include finding a part-time job or opening a business.
Saving is different from investing, which is another option to consider as a source of income. While investing is riskier than saving and serves a different purpose, it can help you grow some savings without having to actively work to earn them.
Average savings account balances depend on many factors, including age.
Age can sometimes affect your experience, income, and expenses. Multiple sources of income, including investing, can help you save more.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation for clicking on links in our stories.
I like the article