Life is full of unexpected surprises, so putting some kind of savings aside for both short- and long-term goals is important. After covering general expenses for your daily or monthly budget, an emergency fund could help you prepare for short-term costs, such as unforeseen medical, auto, travel and other bills. Long-term savings can, of course, be used towards things that are less of an emergency, like planning for future vacations, buying a car or home and retirement. A financial advisor could help you create a financial plan for these goals.
Average Savings by Age Group
In the same way that spending broadly varies by generation and age group, average savings figures do, too. The below data is based on the Federal Reserve Survey of Consumer Finances, and figures reference transaction accounts:
Average Savings by Age Group | Average Savings Balance |
35 and younger | $20,536 |
35 – 44 | $41,545 |
45 – 54 | $71,126 |
55 – 64 | $72,533 |
65 – 74 | $100,249 |
75 or older | $82,805 |
The youngest and oldest age groups will, of course, have the most variation. The youngest cohort, after all, includes minors who are unlikely to have much savings at all, and the oldest includes retired folks who are working their way through their savings.
It is important to begin saving as early as possible before other responsibilities, such as rent and insurance, start to kick in. Try to build an emergency fund so you are protected in case you have urgent, unexpected expenses.
Savings for more long-term financial goals, such as retirement, also vary by age group. Retirement savings increase with each age group and can often become more aggressive as the traditional retirement age approaches, based on the data from the Federal Reserve report. You can also take advantage of catch-up contributions at this time. After age 65, the average savings can drop over time, which is somewhat normal for those in retirement.
Why Saving Is Important
Perhaps, the most important financial goal for any American is the prospect of retiring as soon as they can financially sustain it. But along the way to retirement, you will need money set aside for other important things, such as your children’s college tuition, a home, a car, vacations and much more.
To make all of this a reality, it is important to save money for the future. While this can be easier said than done, failing to adequately save could have a major effect on your quality of life, especially later in life. Remember, though, there are many money-saving techniques out there that can help you set aside funds for you and your family’s future.
Strategies for Saving More

The most basic form of saving comes from budgeting. While this might sound like an obvious point, make sure not to overlook this step. Itemizing all of your purchases into a collective budget can help you find where you are overspending. Once you identify those areas and make a change, you can redirect those funds into your savings.
Some other simple ways to save money include getting a part-time job, starting a side hustle or full-on starting a business. Although these are completely viable options, they are not necessarily a real option for many Americans. If you have kids, already have multiple jobs or have any other extenuating circumstances, these options may not work for you.
One of the most powerful tools for long-term saving is investing. Investments can include anything and everything, from a CD account to investing in real estate to buying a few stocks of your favorite companies.
The reason investing is crucial for long-term savings is because of compound interest. This allows you to earn interest on your interest, growing your savings that much faster.
The type of investments you should go with depends on many factors, the most important of which is your risk tolerance. This principle is a representation of your comfort level when investing in riskier things, like stocks. Understanding the kind of investor you are will help guide your decision when choosing investments for your portfolio.
For example, if you are young and years away from retiring, you may be much more willing to risk your money on the stock market based on the assumption that higher returns could be attainable. On the other hand, someone who is near retirement might want to steer clear of riskier investments and instead focus on safer things like bonds or CDs. A middle-aged person with a family might fall somewhere in between these two extremes.
Regardless of where you land on the spectrum of risk tolerance, investing your money through a brokerage account or financial advisor can have major benefits over the long term.
Savings Recommendations vs. Reality
The most important thing to remember when saving is that every bit helps.While the typical recommendation is to have three to six months’ worth of savings in an emergency fund, many Americans simply do not have the ability to squirrel that much away.
Situations can vary based on individuals factors, such as a major life event, or large-scale factors, such as national or world events.
Bottom Line
The average savings account balance depends on many factors, including your age, income, legal status and more. Your age can affect the job you have, how much you make and your overall expenses. Therefore, it should come as no surprise that those who are older generally have more in the bank than their younger counterparts. Having multiple income streams, including investing, starting a business or working with a financial advisor, can help you prepare for the future.
Tips for Navigating Your Savings
- Managing your savings, investments and life in general can be quite difficult. A financial advisor can help you get your money matters in order. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Another way to make sure your money covers all your bases is to plan ahead. A good start is to take a good look at how you’re allocating your money. SmartAsset’s budget calculator can help you spend just what you need in certain parts of your life and still feel like a million bucks.
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