The Average Retirement Savings Of Top Net Worth Individuals Might Surprise You

Without fail, it can be safely assumed that virtually everyone envisions a future for themselves in which 'work' is a thing of the past. Even if you love your job, something that 28% of Americans said in a 2023 Yoh Survey, you'll likely be thinking about a future in which your time is entirely your own. Retirement is this end goal. However, setting enough money aside to live comfortably, without having to think about working to support yourself, requires a long term vision and a commitment to seeing the plan through. The best time to start saving for your golden years is in your 20s, but that doesn't mean that savers who got a later start can't still put away enough funding to enjoy this idealized future.

Beyond strategies, however, most people will be looking for milestones along the way. It can be hard to pin down an exact figure for how much you should personally be aiming to save since everyone's needs are unique. However, there are some generalized statistics that can help you establish something of a baseline. If you consider yourself a part of the middle class, for instance, you may be a middle income earner with good savings chops. Savers in the middle income quintile, aged 51 to 64, tend to have amassed around $100,000, while those within the top net worth bracket have surpassed $605,000.

Those in the top income bracket average a savings figure of $605,000 for their golden years. This is a sizeable figure, to be sure, but it's worth pointing out that with an average market appreciation rate pegged at 7%, you'll only be able to draw down roughly $42,000 per year (or $3,500 per month)  –if maintaining a break even relationship is your key goal. Add in the average Social Security check of a little under $2,000 per month, and you're looking at a monthly retirement income of about $5,500 (or $66,000 per year), almost exactly in line with the U.S. average wage today. This may not equate to the top wealth bracket lifestyle you may have hoped to lead.

Ultimately, retirement savings is all about accumulation. Starting early and continuing to pile cash into your investment accounts allows for time to work its magic. Over the long term, your investment portfolio will grow with increasing pace. Naturally, the more money you have saved, the longer it will last you in retirement. This isn't just a task of adding funds to a savings account and then drawing them back out in a static format, though. With enough principal value baked into your accounts, your portfolio can effectively generate the money you require to maintain your lifestyle without ever diminishing. This is a fantastic goal that plenty of retirement hopefuls dream about, but it's far harder to accomplish.

Hitting a savings target of $600,000 or more requires a long term dedication to the end goal. With that said, wealthy people are more likely to achieve this. However, no saver will be able to manage this kind of target in big bites. Instead, the best way to arrive at a significant portfolio value is to start as early as you can and consistently add to your retirement accounts. Investing every month when you get paid is a great way to build a habit that places your future at the forefront of your contemporary budgetary practices and financial thought process. It's easy to prioritize purchases in the present over growing your future financial wellbeing, especially when that horizon is still many decades in the future. However, keeping focus on this future goal is the only way to actually reach it.

With that in mind, it's important to point out that wealthy people tend to have a few extra features in common. Consistency and diligence are at the forefront of any successful retirement strategy. But those looking to build a massive reserve of cash will also need to make sacrifices in the present. Surpassing $600,000 in your retirement savings demands an estimated $155 monthly contribution if you start at 20, or $217 per month when beginning at 25. If you instead contributed the $217 from your 20^th birthday, you'd end up with over $840,000. A small sacrifice early on can grow into big benefits later on.

Creating a habit of amplifying your savings is possible, regardless of your financial circumstances. Luckily, it doesn't take a major sacrifice to go from contributing nothing to your future to building a $50 investment into your monthly budget. While there is a lot to hate about the 'cut out coffee drinks' trope, for those who aren't currently saving at all, making that small swap can be a big help in creating a snowball that moves your finances in the right direction. If you're already setting aside $50, $100, or more every month for your retirement, consider boosting that figure by 10% and then reevaluate the health of your budget. Starting at 20, if you invest $100 monthly you'll build a $388,000 retirement account; boosting this by $10 will see this figure jump up to $427,000. Notably, even that $100 contribution places you well ahead of the average middle income saver.

The thing about saving for retirement, or any big purchase is that seeing your portfolio grow can quickly become addicting. By exploring ways to increase your savings by a small margin, you'll often find that the sacrifice really isn't all that traumatic. Moreover, after normalizing a small increase in your savings strategy, many people often look for other ways to add to the amount they can set aside. The snowball effect gains momentum as your growth ramps up, incentivizing a continued responsibility within your budgeting.