Median Savings by Age: Here's How Much You Should Plan to Have

For many adults, even finding enough money to cover recurring expenses such as housing and groceries can be a challenge. But thinking about the costs you'll run into down the road is just as important.

How much should you have saved for your future needs, both short- and long-term? No two individuals are exactly alike, so the answer depends on your particular circumstances. But common benchmarks can give you an idea of target savings for a typical person reaching age 25, 35, 50 and 65. To cater more to your situation, data on the median savings by age — based on Federal Reserve figures — can also help you set goals.

Savings at Age 25

When planning your finances, it's helpful to think of different savings "buckets" to put your money into. Some are for short-term expenses that might be just around the corner, such as fixing a broken car or getting married. You'll also want to allocate additional funds for longer-term needs, such as purchasing a home.

Here are some of the major savings considerations for someone who's at or near age 25:

Emergency Fund

Maintaining a sufficient emergency fund is one of the foundations of a solid financial plan. No one can predict when they'll lose a job or their roof will spring a leak. Having a supply of readily available cash means you can be a bit more prepared when life throws you a curveball.

It's typically a good idea to have enough cash to cover three to six months of living expenses. But if you're a younger worker in a volatile industry, you may want to aim to have even more so you can have a longer-lasting cushion. It's a lesson many people learned the hard way during the COVID-19 pandemic.

Planned Short-Term Needs

As a young adult, you have your whole life ahead of you — and a whole lot of big expenditures, too. Perhaps you see yourself getting married, buying a car or taking an overseas vacation. What you don't want to do is throw those costs on a credit card or take out risky loans that rack up large interest charges, hoping you'll figure out how to pay down the balances someday.

So how much does a 25-year-old need to put away for planned expenses? Everyone's situation varies widely so there's no one-size-fits-all number. But you can estimate what you're going to be spending and break it into manageable chunks that you can work toward.

Let's say you and your significant other are planning to wed in two years and will split the cost of the average traditional wedding. The average cost for a ceremony was $30,000 in 2023, according to The Knot.¹ You could use this to form your short-term savings goal by aiming for $14,000 divided by 24 months. You'd need to put away about $583 per month until the big day to pay it off in full.

You can do the same for any planned costs on your horizon. It may help you to track your progress if you open a different account for each goal or use an app that lets you allocate the money in your account to different savings goals.

Retirement

Most 20-somethings are decades away from leaving the workforce, which means retirement is often a lesser priority. But it shouldn't be. The earlier you start setting aside money for your later years, the smaller the percentage of your paycheck you have to save in order to keep pace.

At this age, you don't necessarily need to worry about a specific balance size. But if you're putting away 10%–15% of your paycheck into a workplace plan or an individual retirement account, you're likely making good progress. At the very least, consider contributing enough to get the most out of any matching funds from your employer.

Savings at Age 35

In your second full decade of adulthood, your savings goals evolve. In many cases, you'll need more stowed away than you did when you were younger. Here's are some categories of generally recommended savings at age 35:

Emergency Fund

Again, a source of cash that can handle three to six months of your usual expenses is a good guideline. But as you hit your 35th birthday, you may find yourself needing a little bit more. That's particularly true if you have kids, especially if your spouse has cut their hours or even left the workforce to help raise them. In that scenario, a six-to-nine-month target may be closer to what you really need.

Planned Short-Term Needs

Often, your 30s is when you make the jump into purchasing a long-term home. Homeownership can bring a lot of satisfaction — but also an added layer of financial responsibility.

While certain repairs can be a surprise, knowing you'll need to do some work on your house from time to time is something you should count on and plan for. According to a 2022 survey, the average cost to maintain a single-family home was $6,139 per year.² Consequently, a home maintenance account is something you might have at the ready in addition to your emergency fund.

You may have other short- and medium-term goals that you're working toward as well. Perhaps you're planning to take yourself or your family on a trip or you anticipate starting your own business. Now's the time to make a realistic assessment of how much those outlays will cost and start saving up.

Retirement

As you progress in your career, it's important to become more goal-minded when it comes to your retirement savings. In most cases, you'll need a significant amount of stockpiled funds to supplement your Social Security benefit when you stop full-time work.

Guidelines often recommend having three times your annual salary saved by 40. So if you're making $70,000 a year, you should ideally have $210,000 saved for retirement. If you start saving fairly early, you can get there by diverting 15% of your paycheck to a retirement account and staying on track. But if you fall behind, that percentage usually has to go up if you hope to retire by your mid-60s.

Children's College Education

If you have any children, you may want to consider putting away money into a 529 education savings plan or other college savings vehicle. Many states have 529 calculators that let you know approximately what you need to put in to cover the cost of a typical college or university education. But you won't want to focus on your child's college fund at the expense of your own emergency savings or retirement needs.

Savings at Age 50

In a number of respects, it's easier for someone approaching their 50s to save than it is for younger workers. By this point, you may have shed student loans and other debt you had in years past. And you're likely hitting the peak earning years in your career arc. That's good news because your financial needs are typically only going to go up. Here are some financial considerations to take into account at age 50:

Emergency Fund

As you enter your 50s, it's still a good idea to have an emergency fund that can cover up to six months of routine bills. If you're married and your spouse has stable employment and if any kids you have are grown and out of the house, you may not need anything beyond that. But if you're the sole breadwinner or have a family that depends on you financially, rounding that up to having nine months of coverage for expenses tucked away can provide a nice safety net.

Planned Short-Term Needs

You may find at this age that your short- and medium-term needs are changing. Buying a home, for example, might be in the rearview mirror. But don't forget about a home maintenance fund — for many folks, that should be around $5,000 based on typical yearly expenses.

And if you're planning any big purchases, such as a new car or a major getaway, you'll want to save for those in separate accounts. Parents with older children may want to create separate funds if they plan to contribute to their child's (and grandchild's) future needs. The earlier you start putting your pennies away, the more time they'll have to potentially grow.

Retirement

When you're young, retirement seems like a hazy mirage on the horizon; by middle age, it's probably starting to look much more vivid. By age 60, the general rule is to have eight times your annual salary set aside for your post-career years. If you plan to retire later than average, for example, or intend to downsize considerably in retirement, you might need a bit less (the opposite is also true, of course).

If you're falling behind, take heart. Under the IRS catch-up provision, you're allowed to put away an extra $1,000 into your combined IRAs once you reach 50.³ It may be a good time to pare down any unnecessary expenses, such as eating out and buying pricier cars, to make room for more robust savings.

Children's College Education

For those already on track to meet their short-term and retirement needs, it's important to keep squirreling away money for any children who are still pursuing higher education. For 2022-2023 academic year, the average yearly cost for tuition and fees ranges from $10,940 for an in-state student at a public school to $39,400 at private colleges, per CollegeData.com.⁴ The more you have saved in a 529 or another account, the less your children will have to worry about student loan debt once they enter the workforce.

Savings at Age 65

The average age of retirement is 64.⁵ That means a typical American reaching 65 has stopped earning a full-time salary and may be drawing money from their savings to maintain their lifestyle. Here are the main savings needs that individuals age 65 and older may want to prioritize:

Emergency Fund

While you don't have to worry about job loss (or at least the loss of a full-time job) when you're retired, you still have to think about expected costs like expensive home repairs. Having a more modest emergency fund — one that can cover up to three months of expenses — can prevent you from over-relying on your investment accounts.

Planned Short-Term Needs

If upcoming expenditures are accounted for in your 401(k) or IRA distribution strategy, you'll want to set aside separate funds just for those expenses. You may find that you need to trim down certain discretionary expenses in order to create room in your budget to build up a vacation fund or a source of money for holiday gift-giving.

Retirement

By age 65, a typical American will need retirement assets equal to about 10 times their salary.

Long-Term Care

No one likes to think about eventually being in an assisted living or nursing facility, but it's a possibility you can't ignore. The average cost of a private room at a nursing home is $9,500 per month, according to Senior Living.com.⁶ And according to the American Association for Long-Term Care Insurance, 54% of people who move into a nursing home stay there for a year or longer.⁷ That can become a huge expense. If you don't have long-term care insurance or home equity you can draw on for those needs, you'll likely need substantial savings to make sure you're covered.

The Bottom Line

As you can see, there are many variables to consider at every life stage. Having a general idea of how much to maintain in savings can help you respond to life's surprises. If you think you could benefit from speaking with a financial professional and having them take a personalized look at your retirement plans, don't hesitate to reach out.

Sources

1. This was the average cost of a wedding in 2023. https://www.theknot.com/content/average-wedding-cost.
2. New Home Care Price Index Reveals Home Maintenance Costs are Starting to Slow. https://www.thumbtack.com/guide/content/average-home-maintenance-cost-440876223059787781.
3. Retirement topics — catch-up contributions. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions.
4. How much does college cost? https://www.collegedata.com/resources/pay-your-way/whats-the-price-tag-for-a-college-education.
5. What Is the Average Retirement Age in the United States? https://www.madisontrust.com/information-center/visualizations/average-retirement-age/.
6. Nursing Home Costs in 2023. https://www.seniorliving.org/nursing-homes/costs/.
7. What is the probability you'll need long-term care? Is long-term care insurance a smart financial move? https://www.aaltci.org/long-term-care-insurance/learning-center/probability-long-term-care.php.