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

How much does the average 70-year-old have in savings? We were curious, too, so we asked. Our 2023 Planning & Progress study found that the average amount of retirement savings for 70-year-olds in the U.S. is $113,900. When we asked this group how much they need to retire comfortably, their answer was much higher at $936,000.

While these are interesting data points, your specific retirement savings goals may be different from someone else’s. The better question to ask might be this: How much savings do you need to be comfortable in retirement?

The different types of retirement savings

The ideal retirement plan involves generating multiple streams of income to provide both stability and tax flexibility in retirement. Here are a few potential components of a well-diversified retirement plan:

• Cash savings. Having liquid cash reserves in a high-yield savings account is a good safety net for retirees. These accounts offer a higher interest rate than traditional savings accounts.

• Retirement accounts. 401(k)s and traditional IRAs, which are funded by pre-tax contributions, can significantly boost your retirement savings. On the flip side, Roth IRAs and Roth 401(k)s, which are funded with after-tax dollars, can help you manage your taxable income in retirement.

In addition to savings and investments, you can also tap into various sources of guaranteed income in retirement. Guaranteed income streams are insulated from market volatility, making them safer and more reliable.

• Income annuities. Similar to Social Security and pensions, annuities provide fixed monthly income. Because you often receive those payments for life, they reduce the risk of outliving your savings in retirement.¹

• Whole life insurance. In addition to protecting your loved ones, a permanent life insurance policy accumulates cash value over time. Because it’s guaranteed to grow, this accumulated value can also serve as a cash reserve or a source of income, particularly during market corrections or recessions.²

How much retirement income should you have at 70?

According to our 2023 Planning & Progress study, most 70-year-olds in the U.S. have about $113,900 saved by the time they reach age 70. However, no two households spend their retirement income the same. Figuring out how much money you’ll need each month depends on your lifestyle, goals and unique retirement vision. Thinking about how you see yourself living after you leave the workforce will give you a good starting point for forecasting your expenses. Other than your regular expenses in retirement, here are a few other important things to consider:

At what age you want to retire

Some couples who are close in age time their retirements in sync, while others plan around Medicare eligibility and other savings goals and space it out. Working longer means you’ll have more time to save, and your savings will have more time to grow. Of course, you will also have fewer years that you’ll need to rely on your retirement income. That means that on a yearly basis, you may have to save less. Retiring sooner means saving more.

When you’ll begin receiving Social Security

The longer you wait to begin taking Social Security payments, the more you are eligible to take, which increases your total Social Security benefit.

Potential long-term care needs

It’s always a good idea to plan for the risk that you will live longer than you think. But as you age, your needs may become more expensive. Be sure to account for potential long-term care needs. If an aide or nurse needs to come to your home or you move into a nursing home, then the out-of-pocket costs could really eat into your retirement income if you haven’t planned ahead.

When you begin using your retirement savings, having a mix of investments and assets that aren’t tied to the market is helpful because you can continue to earn money on the market but rely on money from a savings account in a down stock market to avoid having to sell your stocks when they are low. There are also different tax benefits to different types of savings, and by drawing strategically from each, you can maximize your retirement savings. (This is where a financial advisor can really be helpful.)

Your retirement lifestyle determines your savings target

No matter how much money you save for retirement, it’ll only go as far as your lifestyle allows. Think about what you want from retirement and talk with your spouse or partner if you have one. Analyze whether your current savings rate can realistically support that vision, based on conservative assumptions about risk and future returns. If not, you may need to tweak your savings strategy or compromise to adjust your expectations.

As you determine your retirement savings target, the 4-percent rule can be a good starting point—though it’s not a comprehensive plan. This is simply a general rule that recommends withdrawing 4 percent from your savings during your first year of retirement. You then continue to withdraw the same amount each year, plus a little extra to account for inflation.

Your retirement plan should be tailored to your unique goals and financial situation. As you approach retirement, a financial advisor can help you design a savings plan that will help you reach your goals and, once you reach retirement, can help you design a retirement income strategy that leverages the benefits of different financial products in the most tax-effective way given current market conditions. That way, you can spend less time on finances and more time enjoying the retirement you’ve worked hard for.

1-Income annuities have no cash value. Once issued, this annuity cannot be terminated (surrendered), and the premium paid for the annuity is not refundable and cannot be withdrawn.

2-The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.