Average Retirement Savings of Retirees 2011

Based on the Federal Reserve Board Panel Survey of Consumer Finances, median retirement savings (plus investments, not including a primary residence or value of pensions) is $333,000 for families where the head of household is retired for 2009.   The average non-residential debt was $42,000 for net financial assets of $291,000.

Note that this is a measurement by household and not by retired individual.

This appears to be much more than other sources report, although insufficient for retirement comfort (see following analysis).  The discrepency between sources may depend on how "retired is defined."  The above data was based on surveys and apparently on how the survey respondent classified themselves.  Other data sources however define retired as receiving some type of retirement compensation (e.g. pension, social security, etc).

Based on very limited data from a recent survey by the EBRI in 2011, average retirement savings (plus investments, not including a primary residence or value of pensions) is in the neighborhood of $20,000 - $50,000 (see table below). It may be more accurate to state that the figures below reflect the median, rather than an average.

Only 17% reported savings exceeding $250,000.  Based on many calculations I have done, retiring in 2011 would require at least $1 million to live comfortably yet very conservatively (assuming no other income).  Of course, if one receives a $4,000 monthly pension and lives in rural Alabama, you could likely retire comfortably with no retirement savings.

It is a widely agreed in the financial community that 4% is a safe annual withdrawal rate from a retirement nest egg. That means from a one million-dollar portfolio, one could safely withdraw $40,000 annually and increase that $40,000 by 3% annually to offset inflation and never run out of money.  If a hypothetical retiree requires the $40,000 annually as per our example, and feels comfortable relying on the $20,000 social security annually due him, then he needs only $20,000 annually from savings.  This could be fulfilled by a $500,000 portfolio. (You can get your own estimates of retirement income and required savings).

But as the table below indicates, average retirement savings are sorely lacking as 68% of retirees say that social security, a tenuous source of income, is a major source of retirement income.  The second most important source, again uncontrollable by the retiree, is employer pensions (which particularly in the public sector, are at risk). View the table:



















So we can easily conclude from the above that average retirement savings in 2011 are inadequate for financial independence. Most retirees are relying heavily on external sources of funds which are not reliable.



39 thoughts on “Average Retirement Savings of Retirees 2011

  1. Andy Nathan says:

    Great blog post on "Average Retirement Savings of Retirees 2011"

  2. These numbers are not surprising. With the way things have been the last few years these statistics will most likely become even more extreme.

  3. Jeff says:

    I am concerned by the amount of older people who have zero savings, get laid off from work, and never participated in a 401k in their entire lives.

  4. Pressure Cleaning says:

    "So we can easily conclude from the above that average retirement savings in 2011 are inadequate for financial independence." - I can tell...

  5. toii says:

    Wow come-on it is important to help everyone save for a better life when they are older.

  6. Frank Bowes says:

    At least $1 million to live comfortably yet very conservatively? Surely that can't be right? I remember a time (Not really so long ago) when having $1 million meant you were rich; it just goes to show how far we have fallen.

  7. jason @ Early Retirement Savings says:

    Due to recent economy condition in US, I believe we need more figure for the retirement savings.

  8. Ripon says:

    Life insurance corporation can help in savings and after retirement a good life can be lead.

    LIC Softwares

  9. Jenny says:

    In Eastern Europe people usually don't have even such savings, they don't have them at all...
    Jenny from application development services

  10. Chris says:

    The average non-residential debt was $42,000 for net financial assets of $291,000.

    Like you go on to say, I have a hard time finding that to be true. That seems way, way too high. Granted, that should be a low number. I don't want to get on the soap box and lecture, especially at 21, but people are so stupid with their money! I see people struggling with debt and going on vacations! It's astonishing the irresponsibility.

    Something to consider: Reverse Mortgages. Not saying they're perfect but they're definitely an option.

  11. Chris says:

    @ Frank

    My parents used to tell me about those times. How when they were growing up a million dollars was like...a big deal. A million dollars was a MILLION DOLLARS. That's reflected in our rhetoric today ("What would you do if you won a million dollars?") as if it's still this remarkable sum. The reality is...it's not. I mean, it's definitely nothing to scoff at. You can buy a nice home out in Iowa and deck it out and have a few hundred k left. But it's not like you got your million and that's all she wrote. And if you live in some areas of California, that might not even get you a home!

  12. yajiv says:

    What could be a good savings idea? Which has low risk ? I am living in India. ....

  13. In Denmark we have the same problem. A growing amount of retired people, with very limited savings - and a decreasing number of people working to support them.

  14. Retirement savings are indeed inadequate and the bad thing is that it's only going to get worse!

  15. irwan says:

    retirement savings is very important because every old man deserve has good living

  16. Brian says:

    I agree with the above commenter. 1 Million used to be alot, even just 10 years ago. Inflation has just killed everything. It used to be hard to earn money and

  17. Price comparison says:

    "The average non-residential debt was $42,000 for net financial assets of $291,000." This is huge!

  18. Erica says:

    In your conclusions what are these "external sources of funds" you are referring to? Can you please name some? These are not the traditional like social security or pension?

  19. Every conservative politician in 2011 seems to support raising the retirement age significantly. I'm not sure I agree with this; it's certainly not the answer to fixing the economy, if that's the thought-process behind raising the age (more years of productivity contributing to the economy). In my opinion we could help the economy a lot more by, say, bringing salary caps and corporate taxes to pre-Reagan levels.

  20. Al3ab says:

    Wow come-on it is important to help everyone save for a better life when they are older !!!!

  21. Apostille says:

    What do they do with those retirement funds after all? any survey on that?

  22. Mona says:

    It is awful for older people especially for those who do not have sufficient savings. With these crazy financial times more and more people are finding it difficult to save and more are in debt. Some are also seeking IVA advice to see their options. (in the UK)

  23. Retirement savings would be much helpful for better life in the middle of recent economic crisis.

  24. M. Jewel says:

    I trust the "Federal Reserve Board Panel Survey". But I think EBRI have more informative content. Thank you for this survey.

  25. Matt says:

    A lot of retired people in Florida are feeling the pressure of not having enough to live on. Let's hope things turn around soon.

  26. Andean says:

    Great information. Retirement has made major impact on income, especially here in Indonesia -where i live-. Health problem in retired seniors was huge and need a proper plan to overcome this obstacles.

  27. amit says:

    you should do a comparison of average retirement savings by country. will be interesting to see that.

  28. I have seen many people with no retirement savings at all, and constantly worry about their future, and often rely on their children. But what about those who never decided to have children? I just recentlys tarted my retirement fund, and I cant imagine where id be in 40 years if I didnt.

  29. Great information about retirement savings. Thank you for your informative website.

  30. This kind of information is very enlighten when taking a decision about retirement

  31. In addition to the fact that "average retirement savings are sorely lacking", many retirees do not have long-term care insurance. In the event that skilled nursing home care becomes necessary, a person's retirement savings can quickly be depleted. This is were Medi-Cal Planning comes into play.

  32. Brian D. says:

    It's apparent to me way too many have 'given up' saving for retirement. They realize two-thirds of Americans are on target to have no practical amount of savings, and believe the Fed govt will do something at that time to prevent mass poverty (i.e. baby-boomer-bailout.) In fact, that are obviously betting on it. Beware if you are a prudent saver, because they will be coming after your money to redistribute it to the "have-nots".

  33. Pingback: Retirement Age, Retirement Financial Assets, Retirement income: The newest Research | All About Society
  34. carly says:

    Retirement and Good Living is a great new retirement site for information on finance, health, retirement locations, volunteering, par time jobs and much more at retirementandgoodliving.com

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