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If you’ve ever wondered how well you’re doing with your retirement savings, you’re not alone. After all, most Americans have at least some degree of desire to “keep up with the Joneses.”
Plus, comparing your nest egg balance with others can give you a real-world idea of whether you’re on track to meet your retirement goals. And if you’re a high saver, the peer group you’ll want to know most about is the people in the top 10%.
With that in mind, here’s how the average retirement account compares to the top 10% of savers.
What does ‘average’ mean?
The spread of retirement account balances in the US is incredibly wide. Even calculating the “average” balance requires defining some terms, notably “median” and “mean”.
The average retirement account balance is the figure that sits right in the middle of all the available data. In other words, 50% of Americans have large balances and 50% have small balances.
The average retirement account balance is the mathematical average of all account balances, calculated by dividing the total amount of assets in retirement accounts by the number of accounts. This average is usually much higher than the average balance, as large balances at the top can increase it dramatically.
According to the Federal Reserve’s most recent survey of consumer finances, published in October 2023, 54.3% of American households had retirement accounts in 2022. Among those who had, the average reported balance was:
- The average balance was $86,900.
- The average balance was $334,000.
That huge difference — from $86,900 to $334,000 — provides a clear picture of how high-balance savers meaningfully increase their “average” account balance. Depending on what kind of comparison you’re trying to make, the average retirement account balance may be a more appropriate figure to use.
How much share does the top 10% hold?
There is no definitive study that shows how much money the top 10% of savers in the US have in their retirement accounts. But data from the Congressional Research Service allow unbiased estimates.
According to CRS data, which is based on the Fed’s SCF:
- 4.6% of American households had more than $1 million in retirement accounts
- 4.7% had $500,000 to $1 million in retirement accounts
Add those two figures together and they show that about 9.3% of households have $500,000 or more in retirement accounts. This can serve as a rough proxy for the “top 10%”.
Despite countless headlines suggesting that Americans “need” at least $1 million in their retirement accounts, data shows that less than 5% of households actually reach that lofty level.
Comparison with ‘average’ savers
SCF data allows clear comparisons between average savers and the top 10%:
- Average (median) retirement balance among account holders: $86,900
- Top 10% limit (estimated): $500,000+ in retirement accounts
The typical American family with retirement savings has less than $90,000 set aside. In contrast, the top 10% of households often have half a million dollars or more, with many account balances exceeding $1 million. In short, the top 10% of savers keep at least 5x to 10x more in their account balances than the average American.
How to reach the top 10%
Earning a higher salary and keeping your expenses lower can help you save more. But even those with modest incomes can find a way to build a seven-figure nest egg.
Research from the Federal Reserve, Vanguard, the Employee Benefit Research Institute, and the Congressional Research Service consistently shows that households with the largest retirement balances share these characteristics:
- They save consistently over a long period of time: time is a multiplier. Start early, even with modest amounts, as compounding takes more years to work.
- They contribute at higher rates, often capturing the full employer match: Employer contributions can be a major accelerator if fully utilized.
- They stay invested through volatility: Top savers are more likely to maintain a long-term allocation participating in equity growth rather than sitting in cash.
- They avoid “leakage”: loans, early withdrawals and cash-outs when changing jobs can erase years of progress. Rollovers, when done carefully, keep the compounding intact.
These practices allow compounding to work seamlessly for decades, generating dramatically larger balances than typical savers.
bottom line
According to SCF data, if your retirement account balance is around $87,000, you’re about average across the US. But to be in the top 10%, you should probably aim for a balance of at least $500,000. Saving consistently over time, staying invested, and avoiding withdrawals are all ways to help you reach that goal.