How much money you should be saving based on your age according to experts
Niamh Shackleton
Featured Image Credit: Getty Stock Image
Supposedly the average American has more than $60,000 in savings, with people aged 65 to 74 being the most well off.
Savings can be a touchy subject for many, particularly for young people.
Last year it was reported that Gen Z and young millennials were battling a 'negative wealth' problem. This means that a person's total debts and liabilities exceed the total value of ther assets.
Will Snell, the Fairness Foundation’s chief executive, told The Guardian: "Right now, too many people across the UK are living without a financial cushion or are burdened by debt.
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"This strips them of resilience in the face of economic shocks and shuts them out of the well-documented benefits that even modest asset ownership brings, in terms of future earnings and employment, physical and mental health, and civic engagement."
Meanwhile, across the pond in the US, the Federal Reserve's Survey of Consumer Finances (SCF) found in 2022 that Americans have $20,540 to $72,520 in savings and other transaction accounts on average.
The median amount, however, was drastically different and ranged from just $5,400 to $8,700.
Per Experian, average account balances are 'the total of all balances used in the survey divided by the number of accounts'.
It adds: "Because the data used in the SCF includes super-wealthy households, this statistical average may be larger than the reality of most Americans."
It goes on to say of median balances: "Median account balances show the middle point in the data. In other words, the point at which half the accounts surveyed are larger and half are smaller.
"According to the Fed, median values may be more representative of typical account balances for each group."
According to the SCF's 2022 Survey of Consumer Finances, those aged under 35 had $20,540 in savings on average, while people aged 35-44 had more than double that: $41,540.
This figure went up even further for 45 to 54-year-olds, who on average had $71,130 in savings.
The 55-64 age range then had $72,520, and those aged between 65-74 had $100,250.
The final age group (75 and above), were found to have saved $82,800 on average.
According to Ally Bank, by the age of 30 you should aim to have 1x your income saved. By 40, you should have 3x your salary saved, and by 50 you should have 5x your income saved.
When you're 60, you should hopefully have 7x your income tucked away in the bank.
However, the bank pointed out that the amount you want to save is based on your salary, your planned retirement age, and the kind of lifestyle you want after retiring.