What Is the Average Savings Account Balance? (2024 Guide) (2024)

Key Statistics on Average Savings Account Balances

According to the Federal Reserve’s 2022 Survey of Consumer Finances (SCF), Americans’ average (mean) household savings account balance is $62,410. However, the median savings account balance of $8,000 might be a more accurate representation. Since the median looks at the middle value rather than the average, it is less affected by outliers.

Whether you look at the mean or the median, statistics show an American’s savings increase as the following happens:

• They become older
• They have better job security
• Their children leave home

However, after age 70, savings tend to decline for the following reasons:

• Increased inflation over a person’s lifetime
• Rise in healthcare costs
• The need to draw down savings accounts

According to USAFacts, most U.S. households have at least $1,000 in transaction accounts (savings and checking accounts). Approximately 12% of Americans have $100,000 or more, while on the opposite end, 12% of adults have no savings.

Factors Influencing Average Savings

A range of economic and personal factors influences the average savings of Americans. Understanding these can provide insight into broader savings trends and individual financial health.

1. Economic conditions: During periods of economic growth, people generally feel more secure in their jobs and optimistic about the future, which might lead them to spend more and save less. Conversely, during a recession or economic downturn, people often save more as a precaution against potential financial hardships and unexpected expenses.
2. Interest rates: Higher interest rates provide an incentive for people to save. When interest rates are low, there’s less incentive to keep money in savings accounts since the returns are minimal.
3. Debt: High debt can significantly reduce an individual’s ability to save. Paying off debt often takes precedence over saving, especially if the interest paid on debt exceeds potential earnings from savings.
4. Cultural and psychological factors: People’s attitudes toward money and saving, shaped by their cultural background and personal experiences, can also influence behavior. Some may prioritize saving for future security, while others might focus on enjoying their earnings in the present.

Income Level

The data on average savings account balances reveals a clear correlation between income levels and the amount of money saved. As one moves up the income ladder, the average savings account balance increases significantly.

• Lower-income groups (less than the 20th percentile): Those in the bottom 20% of income distribution have the lowest average savings, at $7,860. This group likely faces the most challenges in meeting daily living expenses, leaving little room for savings.
• Middle-income groups (40 to 59.9th percentile): Individuals in the middle-income bracket have an average savings of $25,200. This group likely benefits from balancing income and living expenses, enabling a healthier savings habit.
• High-income groups (80 to 100th percentile): In general, higher-income earners have more money left over after covering essential expenses. These individuals are likely to have greater access to financial education and resources, enabling them to make more informed personal finance decisions.

Age/Life Stage

The trend for average savings account balances shows a steady increase as individuals age before declining slightly for the oldest age group.

• Young adults (Less than 35 years old): The youngest group has an average savings of $20,540. This amount can be attributed to early career stages with typically lower earnings, higher incidences of student loan debt and other financial obligations related to early adulthood.
• Middle age adults (35 to 54 years): As individuals enter their prime earning years, there’s a noticeable increase in savings. This increase can be attributed to career advancement, higher incomes and a more focused approach to financial planning and saving for retirement.
• Pre-retirement age (55 to 64 years): The average savings account balance peaks at $75,520 as individuals prioritize retirement savings once their income levels out and children typically become financially independent.
• Early retirement (65 to 74 years): Interestingly, the average savings continue to rise for those in early retirement. This could be due to continued investment growth, downsizing or liquidating assets like homes and lower daily expenses post-retirement.
• Older seniors (Greater than 74 years): There’s a slight decrease in savings for the oldest age group, possibly due to the onset of healthcare costs, supporting family members financially or drawing down on their savings more significantly to cover daily living expenses in the absence of a regular income.

These trends underscore the importance of saving early and actively planning for retirement to ensure financial stability later in life.

Education Level

Average savings account balances across education levels reveal a clear trend: individuals with higher levels of education tend to have a larger savings account balance. Individuals with a college degree have more than 12 times the average savings than those without a high school diploma.

Some potential reasons include the following:

• Higher income: Individuals with higher education typically have greater earning potential, leading to more disposable income for saving.
• Financial literacy: Higher education often exposes individuals to financial planning concepts and tools, enabling them to make informed saving and investment decisions.
• Future planning: Individuals with higher education might have more significant long-term financial goals motivating them to save more.

What Is Considered a “Good” Balance?

Defining a “good” savings balance is subjective and depends on age, income and personal finance goals. However, some general guidelines can help you navigate your journey.

Emergency Fund

Building a solid emergency fund is crucial. Experts recommend aiming for three to six months’ worth of living expenses to cover unexpected events like job loss, medical emergencies or major repairs. This cushion provides financial security and prevents you from resorting to high-interest credit card debt during challenging times.

Goal-Oriented Savings

In addition to emergency savings, you should prioritize goal-orientated savings. This involves setting specific financial goals such as saving for a down payment on a house, funding a child’s education or planning for retirement. Determining the target amount for each goal and allocating savings accordingly can help you track your progress and stay motivated.

Tips to Grow Your Savings

Effective tips for increasing your savings often emphasize the importance of starting early, regardless of the amount, to leverage the power of compound interest over time. In 2023, Americans saved an average of 4% of their net income, according to the Bureau of Economic Analysis.

Setting a Budget

Setting up a budget that allocates money specifically to a savings account is a good idea. A popular budgeting strategy, such as the 50/30/20 rule, can help you allocate your income toward needs, wants and savings in a balanced manner. Another approach financial experts recommend is saving 10% to 20% of your income.

Even if you can’t start with these amounts, it’s essential you start saving something each month and gradually increase your savings as your income and financial stability allow.

Use the following tips to help increase your savings:

• Automate the process: Automating contributions can help remove the temptation to spend and ensure consistent growth in savings over time.
• Reduce unnecessary expenses: Analyze your spending habits, identify areas where you can cut back and redirect those savings toward your financial goals.
• Access high-yield savings accounts: These accounts typically offer higher annual percentage yields (APY) than traditional savings, allowing your money to grow more quickly. Money market accounts should also be a consideration as they typically have a higher APY than a regular checking or savings account.
• Save one-time monies: Put money such as tax refunds, birthday cash or other unexpected monetary gifts directly into your savings account.
• Leverage technology: Budgeting apps, expense trackers and online banking tools can provide valuable insights into your financial habits and help you make informed decisions.

By combining these strategies and tools, you can establish a solid foundation for achieving your savings goals and building long-term financial security and peace of mind.

The Bottom Line

The ideal amount of savings varies, and there isn’t a one-size-fits-all answer. However, it’s crucial to prioritize building a sufficient emergency fund and setting goals for additional savings. Consistent saving today, even in modest amounts, allows the power of compound growth to work its magic over decades.

The data on average savings account balances reveals interesting trends, but your personal financial journey is unique. Use these insights as a launching pad to take an honest look at your current savings and future financial goals and regularly revisit your financial plan as life circ*mstances evolve.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someoneyou trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.