Most Americans Have This Much in Savings by 70. How Do You Compare?

Part of retirement planning includes determining how much to save and invest so you can enjoy the type of lifestyle you desire. Setting your savings target by age can be a good way to organize your strategy and gauge how to track progress with your goals. You might also be interested in how much the typical retiree has saved at age 65, 70 and beyond. In this article, we’re going to focus on how much the average person has saved and possibly should have saved at the age of 70. Keep in mind, though, that your situation is still completely unique to what your goals are. You may want to work with a financial advisor to make sure your savings goals are in line with where you need to be later on.

How Much Does the Average 70-Year-Old Have in Savings?

According to data from the Federal Reserve’s most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved. That’s money that’s specifically set aside in retirement accounts, including 401(k) plans and IRAs.

The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately:

• $60,000 in transaction accounts (including checking and savings)

• $127,000 in certificate of deposit (CD) accounts

• $17,000 in savings bonds

• $43,000 in cash value life insurance

In terms of overall trends, the numbers show an increase over the previous Survey of Consumer Finances. According to that survey, the average 65 to 75-year-old had $381,000 saved for retirement in 2016. That figure, however, was well below the $486,000 70-year-olds had saved on average in 2013.

Whether the Survey of Consumer Finances for 2022 shows an uptick in savings or a decline remains to be seen. While Social Security benefits have seen several cost-of-living increases since the last survey was completed, persistently high inflation has put more pressure on Americans’ spending power. The survey may show that 70-year-olds have less in retirement savings if they’re spending more to compensate for higher prices.

How Much Should a 70-Year-Old Have in Savings?

Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement. If you consider an average retirement savings of $426,000 for those in the 65 to 74-year-old range, the numbers obviously don’t match up.

The amount a 70-year-old should save for retirement can depend on several things, including:

• Desired retirement lifestyle

• When they apply for Social Security benefits

• Other sources of retirement income, such as a 401(k), IRA, pension or annuity

• Other savings, including taxable brokerage accounts, savings accounts and CDs

• Overall health and life expectancy

The more money you anticipate spending to cover your cost of living in retirement, the more you’ll typically need to save. Social Security benefits are a staple part of many retirees’ income picture, but those payments may only go so far. Pensions, meanwhile, are becoming more of a rarity as employers opt for defined contribution plans instead.

Long-term care can put a strain on retiree budgets and increase the amount of money you need to save. Medicare doesn’t cover long-term care though Medicaid does. But to qualify for Medicaid, you’ll typically need to spend down your assets. Purchasing long-term care insurance can be a workaround so you’re not at risk of draining your savings.

What Is a Good Net Worth at 70?

Net worth is a measure of your assets vs. your liabilities. In other words, it’s the difference between what you own and what you owe.

The average net worth of Americans aged 65 to 74 hovers around $1.2 million. The median net worth is lower, at $164,000. The typical 70-year-old has around $105,000 in debt, including mortgages, home equity loans, credit cards and student loans, as measured by the Fed’s data.

What constitutes a good net worth is situation-specific and largely linked to your retirement goals. There are different rules of thumb you can apply to come up with an ideal net worth calculation. For example, one rule suggests having a net worth at 70 that’s equivalent to 20 times your annual expenses.

If you spend $100,000 a year to live in retirement, you should have a net worth of at least $2 million. On the other hand, if you only spend $40,000 on living expenses, then your target net worth would be much lower, at $800,000.

Is Retiring at 70 a Good Idea?

Whether it makes sense to retire at 70 can depend on your finances and what you envision for your dream retirement. When choosing a retirement age, it’s helpful to consider:

• When you’ll really need to take Social Security benefits

• Whether you’ll still work in a part-time capacity after retiring

• How long you plan to live in retirement

• Your desired savings goal and current savings rate

If you can delay taking Social Security benefits until age 70, that can boost your benefit amount. You’ll be eligible to collect 132% of your benefit amount by waiting longer to apply.

You can also continue saving and investing for retirement if you’re working longer. For example, you can continue maxing out your 401(k) each year, or at the very least, contribute enough to get your full employer match. You can also funnel money into an IRA for supplemental savings.

Retiring at 70 means you’ll have a two-year gap before you’ll need to begin taking required minimum distributions (RMDs) from a traditional 401(k). You’ll also need to take RMDs if you have a Roth 401(k), but Roth IRAs are exempt from this rule.

Within that window, you might decide to convert your traditional IRA to a Roth account. Doing so can mean a higher tax bill in the year of the conversion since you’re required to pay taxes on your traditional IRA earnings. But moving forward, you’d be able to take tax-free distributions from your Roth IRA.

The Bottom Line

How much does the average 70-year-old have in savings? Just shy of $500,000, according to the Federal Reserve. The better question, however, may be whether that’s enough for a 70-year-old to live on in retirement so that you can align your budget accordingly. With no end to higher inflation in sight, retiring on $500,000 may not be realistic for everyone. The good news is that the younger you are, the more time you have to plan, save and invest for the future.

Retirement Planning Tips

• Consider talking to your financial advisor about the pros and cons of retiring at 70 and what your personal timeline for retirement should look like. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

• Delaying Social Security benefits could help you to collect more money in retirement. Taking benefits early, however, could reduce your monthly payment amount. The earliest you can begin taking Social Security is age 62 but it may benefit you to wait until at least your full retirement age to apply. Also, keep in mind that if you do decide to take Social Security early and you continue to work, your benefit amount may be reduced even further. Understanding how to maximize Social Security benefits can help you get the most money possible.

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