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I don’t put much stock in most “averages,” whether they’re rules of thumb ^[3] or average net worth ^[4], but every once and a while it’s good to know where you stand.

So where do we find the average retirement savings by age? We are forced to rely on the internet. Unfortunately, with the recent stock market crash, writing about nest eggs and average retirement savings hasn’t been very popular. To get data, we turn to the Employee Benefit Research Institute’s latest report on Individual Account Retirement Plans (August 2009 ^[5]).

The EBRI’s report has a ton of detailed information on almost everything you might want to know about retirement savings and participation, from defined contribution plans to IRAs. For the purposes of our comparisons, I’ll just look at the age breakdown (2007 figures adjusted to 2009):

• < 35: $6,306
• 35 – 44: $22,460
• 45 – 54: $43,797
• 55 – 64: $69,127
• 65 – 75: $56,212
• 75+: (sample size insufficient)

Some words of warning after you read this:

• Remember that this data is just data, you can’t draw any conclusions of what’s right or wrong from the statistics alone.
• If you’re “below average,” you shouldn’t feel bad about it. Age is not a good indicator of where you are in your life. Some people get a later start and others have a more inflated lifestyle, how much you’ve saved by when should only give you a bar to reach.
• If you’re “above average,” you shouldn’t rest on your laurels and think you’re doing great. Much like the words I wrote for those who are below, being above doesn’t mean you’ll have enough for retirement. You have a few years until retirement, a lot can happen then, so keep at it.
• Average doesn’t mean someone in their 20s that has more than $6,306 is set in retirement (or that someone with less is screwed). It’s estimated that you should spend about 4% of your nest egg each year. At 4%, your nest egg should last long enough. How does that 4% figure translate to your estimated yearly expenses? Divide how much you think you’ll spend by 0.04 and you have your target (based on that rule of thumb) – $50,000 a year requires a nest egg of $1.25M.

Much like average net worth ^[4], it’s useful to know where you stand but don’t put too much stock in it.

How do you stack up?