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How much Americans have saved for retirement by age

On average, Americans have about $141,542 saved for retirement, according to the “How America Saves 2022” report compiled by Vanguard, an investment firm that represents more than 30 million investors.

However, most people probably have a lot less: the median 401(k) balance is just $35,345.

This means that half of the account balances are below this amount and the other half are above. And because the averages can be skewed by a few outliers, the median account balance is considered more representative of what most people have actually saved in their 401(k) accounts.

Here’s a look at how much money Americans have saved for retirement, by age:

Besides age, many other factors influence retirement savings, such as income and how long an employee has been with a company. Older employees who have worked longer tend to have higher account balances than employees who are starting their careers, for example.

But try not to focus exclusively on your exact balance. “If you focus too much on your account balance, you may be tempted to react to short-term volatility at the expense of your long-term financial goals,” says Nilay Gandhi, senior wealth management advisor at Vanguard.

Instead, Gandhi encourages investors to focus on factors they can control, such as expenses, investment choices, and their savings rate.

“We believe participants should achieve a total savings rate of 12% to 15%,” including employer contributions, says John James, managing director of Vanguard’s Institutional Investors Group.

Don’t panic if you’re not there yet — most investors aren’t.

Here is the average retirement savings rate for investors at all ages:

Gandhi acknowledges that reaching the recommended retirement savings rate of 12% to 15% can be daunting for employees, especially those just starting out.

It’s OK to start with what you can afford. However, “make sure you save at least enough to get your employer’s full match,” Gandhi recommends.

From there, “increase your savings rate by 1% to 2% each year until you reach the target savings rate of 12% to 15%.”

Vanguard provides free retirement income calculator that anyone can use to estimate how much money they might need after retirement. The tool considers specific individual factors, including current age, expected retirement age, current income, savings rate, expected income needs in retirement, and additional sources of income.

You can also check out CNBC Make It’s retirement planning tool which can help you calculate the amount of money you will need for a comfortable retirement based on your age and income.

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