Are You on Track? The Average Retirement Savings by 50 and 60
We’ve all wondered: “How does my retirement savings compare to everyone else’s?”
It’s a natural question and one that becomes more pressing as you approach your 60s.
Empower (a large 401(k) provider in the US) released their annual report showing what retirement savings look like across various age groups, given its 401(k) plan data.
While I don’t typically like creating broad, abstract comparisons between people who live different lives and situations, let’s look at how equipped the average American is for retirement.
The Average Retirement Savings by Age
According to Empower as of January 2025, here’s what the average and median retirement savings balance looks like by decade:
At first glance, the average balances (though, those with large balances can skew this number) might look pretty encouraging, especially for those in their 50s and 60s.
After all, we’ve all been told that “you need at least $1 million saved for retirement”. So, that seems pretty good.
However, the median (which is a better representation of the typical person) balance isn’t quite as promising.
According to Empower, 50% of 60 to 69-year-olds have less than $591,000 in retirement savings.
Considering that retirement could last 25 to 30 years or more. That balance may not be sufficient to supplement your retirement income needs beyond social security for multiple decades.
What These Numbers Don’t Tell You
While it may seem helpful to see how you stack up, the data does not show:
Your cost of living: $1 million goes a lot further in Spokane than it does in San Francisco.
Your lifestyle goals: Are you big or modest spenders? Do you have sizable annual travel plans? Will you downsize? Do you wish to support family members or charities?
Your income sources: Social Security, pensions, rental income, and part-time work can reduce the need for extensive retirement assets, especially if your guaranteed income sources come close to providing for your living needs.
Your longevity: A 65-year-old couple today has a nearly 50% chance one spouse lives into their 90s. You have to account for the possibility of living longer than you think.
Your tax situation: Withdrawals from IRAs, 401(k)s, and other pre-tax accounts aren’t free money, they’re considered taxable income. You need to plan around how paying taxes on this money might impact your retirement spending plans.
In short, a “retirement number” isn’t meaningful on its own. You have to start by defining the above variables and work up to the number that can accommodate them.
What You Can Do in Your 60s (Regardless of Your Balance)
Whether you’re ahead, behind, or right on track, this decade is critical for making strategic moves.
A few things to consider:
1. Fine-tune your withdrawal strategy.
This isn’t just about how much you take, it’s about where you take it from. Spending strategically from your Roth, Traditional, and brokerage accounts can make a very big impact on your retirement taxes.
2. Consider delaying Social Security.
Consider delaying Social Security, if you can afford to wait.
Each year that you wait past age 62, your benefit grows (roughly 8% per year). If you can wait until 70, you’ll receive the maximum monthly payout for life. Your social security strategy should be personalized, given the other variables of your situation.
3. Revisit your investment approach.
Too little risk can be just as dangerous as too much. Consider aligning your investment strategy with your spending timeline using a bucket strategy to help weather market ups and downs.
4. Consider Roth conversions in low-income years during early retirement.
The early years of retirement (before social security, pensions, and Required Minimum Distributions begin) can be an opportune time to shift pre-tax retirement money into Roth accounts at lower tax rates, reducing your overall retirement tax burden.
5. Start projecting future healthcare costs.
Medicare isn’t free. Understanding premiums, IRMAA brackets, and long-term care options now can help avoid surprises later.
6. Get a personalized plan.
Personal finance is personal. Averages are informative, but like anything in life, you get ahead when you deliberately plan for what’s to come.
It’s easy to look at charts and benchmarks and wonder if you’re behind. But retirement success isn’t about keeping up, it’s about being intentional.
Many of the retirees who feel most confident aren’t the ones with the highest balances. They’re the ones who have a clearly defined plan and strategy that they are executing every year.
Have any questions about what you’ve read? Let’s talk about them!
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