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How Much Does the Average American Have in Savings?

How Much Does the Average American Have in Savings?
Jacqueline DeMarco
Jacqueline DeMarcoUpdated January 4, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
It’s important to save for a rainy day since we can’t predict all of the expenses that life can throw at us. From car and home repairs to medical bills, sometimes a pricey expense comes out of nowhere. Having some money socked away in a savings account can help you cover unexpected expenses without running up costly credit card debt. It can also help you work towards upcoming goals like buying a car or going on vacation. How much does the average person have in savings? According to the U.S. Federal Reserve’s most recent data, the average combined checking and savings account balance in the U.S. is $41,700. Of course, savings amounts vary significantly by age. Here’s a look at the average savings rate by different age groups to help you see how your account balance compares to your peers. 

Average American Savings Account Balance 2022

So, how much does the average American have in savings? According to data from the 2019 Survey of Consumer Finances by the Federal Reserve, the most recent year for which they polled households, the average American family has $41,600 in their transaction bank accounts, which include savings accounts, checking accounts, money market accounts, money market funds, cash accounts at brokerages, and prepaid debit cards. It’s important to understand, however, that the average (or “mean”) is calculated by adding up all savings and dividing that amount by the number of accounts. The Fed also calculates the median figure, which is the middle value when the data is arranged in an order either ascending or descending. Since the average figure can be skewed by high-income outliers with very large deposits, the median figure may provide a better estimate of how much most Americans have actually saved. The median American savings account balance is only $5,300.

Average Savings by Age

Here’s a look at average savings by age.

Age 25 Average Savings

The Fed does not provide specific numbers for people in their mid 20s. Instead, they provide data for adults younger than 35 years old. For this group, the average savings amount is $11,250. The median savings for those under age 35 is $3,240. Twenty-somethings, however, may have a lower average savings than that, given that young adults often have low salaries, haven’t been working for very long, and may have high levels of education debt to contend with. Nevertheless, age 25 is not too early to start saving. To get started, you may want to consider opening a high-yield savings account and adding a small amount to it each month. Ideally, you’ll want to have an emergency fund that could cover at least three to six month’s worth of living expenses in the event of an unexpected set-back (like a job loss or emergency medical expense). It can also be a good idea to start making small, regular contributions to your retirement via a 401(k) at work or an individual retirement account (IRA). Recommended: What is the Average Student Loan Debt?

Age 30 Average Savings

The Fed doesn’t collect data specifically about 30-year olds but groups together everyone under 35. Their numbers show that the average savings for people under age 35 is $11,250. The median savings is $3,240.As you enter your 30s, you may be earning more and carrying less student debt. As a result, you may be able to begin thinking about saving towards your larger financial goals. These might include fully funding your emergency fund (if you haven't already), contributing the maximum amount to your 401(k), and saving toward the downpayment on a home.

Age 35 Average Savings

At age 35, you fall right in between two of the groups looked at by the Fed – those under age 35 and those ages 35 to 44. The average savings amount for people under age 35 is $11,250; the median is $3,240. The savings amount for people ages 35 to 44 is $27,900; the median savings is $4,710. As you take on more financial responsibilities in your 30s, you may want to re-evaluate your emergency cushion. If you currently have a mortgage, it can be a good idea to have at least nine months of living expenses tucked away in a savings account. Consider keeping it in an account that earns interest but is easily accessible, such as a money market account or high-interest savings account.You’ll also want to make sure you’re maxing out your 401(k), especially if your employer offers matching funds.

Age 40 Average Savings 

The Fed’s most recent data shows that the average savings for people ages 35 to 44 is $27,900. The median savings is $4,710.At this point, you may be in or nearing your prime earning years and have more money available to put into savings. Your goals may also have shifted. Instead of thinking primarily short-term, you may be thinking more about longer-term goals like retirement or saving for a child’s education. You may also be more focused on investing, which can yield potentially higher returns than savings accounts, though there is risk involved.Recommended: Brokerage Account vs Saving Account
AgeMedian Balance of AccountsAverage Balance of Accounts
Under 35$3,240$11,250
35 to 44$4,710$27,910
45 to 54$5,620$48,200
55 to 64$6,400$55,320
65 to 74$8,000$57,670
75 and older$9,300$60,410

Looking at the Median Savings for Americans

Based on the most recent data from the Federal Reserve, the median savings amount for American families is $5,300. This is the middle amount when all account balances are listed in ascending or descending order. This number can offer a more realistic reflection of average savings in the U.S. than the “average” savings amount because it eliminates outliers (like very large savings accounts owned by unusually high earners), which can skew averages.

Pros and Cons of a Higher Savings Balance

Now that you know more about the average savings account balance, you may be wondering what the ideal amount of savings is. The answer, of course, is that it depends on your age and financial situation. It’s also important to understand that higher savings account balances aren't necessarily always better. While there are many advantages to savings accounts, there are some disadvantages as well. Here’s a closer look.

Pros

Savings accounts allow you to earn interest on your money so it can grow over time. While the interest is typically low, savings accounts are insured, so there’s little risk that you can lose your money. While stocks or mutual funds can offer the potential for much higher returns, there is also a chance you could lose money.Savings accounts also offer convenience. Unlike some other savings vehicles, you don’t have to leave your money untouched for a certain period of time. When you’re ready to spend your savings, you can easily access your funds. 

Cons

The trade off for the safety and liquidity of a savings account is that it generally won’t offer as much interest as you might get with a savings vehicle that involves more restrictions or risk. Interest rates generally don’t keep up with inflation, which means any money you have sitting in a savings account can lose purchasing power over time. Indeed, having too much money in a savings account comes with an opportunity cost, since you might be able to earn more by investing that money in the market. 

Savings Amount vs Money Invested

Saving and investing are actually two different things. Here’s a look at how they compare.

Differences

Saving generally involves putting money aside gradually in a safe place, typically into a bank account. It can also mean putting your money into other savings products, such as a certificate of deposit (CD).Investing, on the other hand, involves taking some risk and buying assets that might increase in value, such as stocks, property, or shares in a mutual fund, over time.

Different Goals

Savings is generally for short-term goals – things you’ll need or want within the next several years. Shorter-term savings should generally stay in a savings account, where returns are guaranteed, and you can’t lose your money. Investing is generally for longer-term goals – at least five to ten years off. When it comes to investing, patience can be key. The longer your money is invested, the more potential it has to grow and earn compound interest, which occurs when you reinvest the investment’s earnings to potentially generate more earnings.

The Takeaway

Comparing your savings to the average savings of other people your age can help provide some perspective. Keep in mind, however, that how much you should save at different points in your life will depend on multiple factors, including your income, education, financial objectives, and the cost of living in your area. If you feel you are falling behind in your savings, it can help to make it a regular habit. Even transferring a small amount of your paycheck into a high-yield savings account each month can add up to a significant savings over time. 

3 Money Tips

1. Because online banks don’t have the overhead costs that brick-and-mortar banks have, they may offer a higher savings account interest rate. Just keep an eye out for minimum balance requirements and monthly fees.2. To get into the savings habit, consider having 10% of your paycheck directly deposited into your savings account. Or, set up a small automatic recurring transfer from your checking account into your savings account on the same day each month.3. To set up a simple monthly spending budget, consider the 50/30/20 rule. This involves splitting your after-tax income into three categories of spending: 50% on needs, 30% on wants, and 20% on savings.Lantern can help you compare online savings accounts and find today’s best rate.

Frequently Asked Questions

How much does the average American have in savings 2022?
How much savings does the average 30 year old have?
Is 20K in savings good?
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About the Author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a personal finance writer and editor based in Southern California. While she spends the bulk of her time writing about complex financial issues, she also tackles a variety of subjects ranging from food to fashion to travel. Her work can be found across dozens of publications such as Credit Karma, LendingTree, Northwestern Mutual, The Everygirl, and Apartment Therapy.
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