How Much Does an Average American Have in Savings?

The ability to save money is a foundational aspect of financial well-being for individuals across the United States. Personal savings provide a buffer against unexpected financial challenges and serve as a pathway to achieving life goals like homeownership, education, or a secure retirement. Understanding typical savings patterns offers insights into household financial landscapes, reflecting individual decisions, economic conditions, and demographic influences.

Understanding the Averages

Discussions about “average” savings often involve two distinct statistical measures: the mean and the median. The mean, or arithmetic average, is calculated by summing all savings figures and dividing by the total number of individuals or households. This measure can be significantly skewed upward by a small number of individuals with exceptionally high savings balances.

In contrast, the median represents the midpoint of all savings figures, meaning half of the population has saved more and half has saved less. The median provides a more accurate representation of the typical American’s savings experience, as it is less affected by extreme values.

In 2022, the median net worth for all U.S. households was $192,700, while the average net worth was approximately $1.06 million, highlighting the impact of high-wealth households on the average figure. The median transaction account balance for liquid assets like checking, savings, money market, and prepaid debit accounts was $8,000 in 2022. The average balance for these accounts stood much higher at $62,410. A broader measure of personal savings, excluding retirement assets, indicated an average of $65,100 per American in 2023. The personal savings rate, defined as personal savings as a percentage of disposable personal income, was 4.5% in 2023.

Savings statistics generally encompass a range of financial assets that contribute to a household’s overall net worth. These assets typically include funds held in various bank accounts, such as checking, savings, and money market accounts. They also include investments like stocks, bonds, and mutual funds, as well as retirement accounts like 401(k)s and Individual Retirement Accounts (IRAs).

Other assets, such as the value of vehicles and Certificates of Deposit (CDs), are commonly included. However, illiquid assets like real estate equity are usually treated separately or factored into net worth rather than readily available savings.

Savings Across Different Demographics

Savings levels vary considerably across different demographic groups, reflecting diverse financial circumstances and life stages. Age plays a significant role in accumulating wealth, with net worth generally increasing as individuals progress through their careers and approach retirement.

The median net worth in 2022 for those under 35 was $39,040, rising to $135,300 for individuals aged 35-44, and reaching $410,000 for those aged 65-74. Transaction account balances also follow this trend, with the median for individuals under 35 at $5,400, increasing to $13,400 for those aged 65-74.

Retirement account balances demonstrate this accumulation over time. In 2022, the average retirement savings for those aged 18-34 was $49,130, growing to $313,220 for the 45-54 age group. Individuals aged 65-74 held the highest average retirement savings, at $609,230, before a slight decline for those 75 and older who may begin drawing down their assets.

Income levels are another determinant of savings capacity. Households in higher income brackets tend to have greater liquid assets and overall net worth. For example, the top 1% of households experienced an increase of over 40% in liquid assets since the pre-pandemic period, while lower-middle-income households saw the smallest proportional gains. Individuals in the top 10% of income earners held an average transaction account balance of $353,030.

Educational attainment correlates positively with savings and wealth accumulation. In 2022, the median net worth of Americans with a college degree was $464,400, a difference compared to the $107,000 median net worth for those with only a high school diploma. Higher education levels are associated with larger bank account balances and a more likely participation in retirement savings plans. For example, 75% of individuals with a college degree had a retirement account in 2022, compared to just 17% of those without a high school diploma. Household composition also influences savings, with couples without children typically holding higher median transaction account balances than single parents.

Common Savings Goals and Account Types

Individuals and households utilize various types of accounts to meet different financial objectives.

Emergency Funds

An emergency fund provides a financial safety net for unexpected expenses like car repairs, medical emergencies, or periods of job loss. Financial experts recommend saving at least three to six months’ worth of essential living expenses in an easily accessible account. These funds are held in interest-bearing accounts, such as traditional savings accounts or money market accounts, to ensure liquidity and avoid penalties or market fluctuations.

Retirement Accounts

Retirement accounts are a key part of long-term savings, offering tax advantages to encourage future financial security. Common examples include 401(k) plans, which are employer-sponsored and allow employees to contribute a portion of their pre-tax income, often with an employer matching component. Individual Retirement Accounts (IRAs) offer a similar vehicle that individuals can open independently. Both 401(k)s and IRAs come in traditional and Roth versions, providing options for either tax-deductible contributions now or tax-free withdrawals in retirement, depending on the account type and individual circumstances.

General Savings and Money Market Accounts

Beyond emergency funds and retirement planning, general savings accounts and money market accounts offer flexible options for shorter-term goals or readily available cash. Traditional savings accounts are basic interest-earning accounts with easy access to funds. Money market accounts are a hybrid, often providing higher interest rates than standard savings accounts while also offering some checking-like features, such as limited check-writing privileges or debit card access. These accounts are suitable for funds needed within a few years or as a holding place for cash not for long-term investments.

Non-Retirement Investment Accounts

Non-retirement investment accounts, such as brokerage accounts, are used for wealth growth outside qualified retirement plans. These accounts are funded with after-tax dollars, offering flexibility in accessing funds without age restrictions or penalties. While earnings may be subject to capital gains tax, they offer broad investment options, including stocks, bonds, exchange-traded funds (ETFs), and mutual funds. Their flexibility makes them suitable for diverse financial goals, including saving for a home down payment, funding a child’s education, or accumulating wealth accessible before traditional retirement age.