The question is irrelevant. The story is how unprepared the median person is prepared for retirement. On that score, the article does explain.
- The average American household has $175,510 worth of savings in bank accounts and retirement savings accounts as of June 2018.
- The median American household currently holds about $11,700 across these same types of accounts.
- The top 1% of households (as measured by income) have an average of $2,495,930 in these various saving accounts. The bottom 20% have an average of $8,720.
- Roughly 83% of savings are in located in retirement accounts like IRAs and workplace-sponsored retirement savings plans like 401(k)s.
- Millennials, who have just started their savings journey, have currently socked away an average of $24,820. Gen Xers have $125,560 in retirement savings. Baby boomers and those born before 1946 have an average of $274,910.
- 29% of households have less than $1,000 in savings.
Point number 2 is the most relevant point. 50% of household have less than $11,700 in savings.
What's wrong with averages? The Skew!
Average and Median Savings by Income Level
The top 1% of income earners have an average savings of $2.53 million and a median savings of $1.16 million.
That average affects people with no savings.
The median savings for 40% of households is zero. The "average" varies by income group but it is much higher.
The "middle" (40-60% of wage earners) median savings is $34,020 but the average is $65,830.
This is where the stats get truly depressing.
The average "boomer" headed into or in retirement has $274,910 in savings.
What's wrong with that?
Well, 50% of boomers have less than $24,280 saved up.
Mike "Mish" Shedlock