When you’re in your 60s, you may be retired or nearing retirement. You need to have your financial ducks in a row as you reach this age since your paychecks will soon stop if they haven’t already.
So, how much does the typical 64-year-old have in their savings account? The numbers aren’t pretty. Here’s the average balance for a 64-year-old.
The typical 64-year-old doesn’t have nearly enough savings
According to research from The Motel Fool Ascent, $8,000 is the median savings account balance for Americans between the ages of 55 and 64. That’s the amount people have in all transaction accounts, including checking, savings, money market, call accounts, and prepaid debit cards.
It’s not a huge sum, and it’s also less than what many other age groups have saved. Seniors beat out those under 35, who have a median balance of $5,400. They also do better than the $7,500 in bank accounts owned by Americans ages 35 to 44.
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However, they have less than the $8,700 owned by Americans ages 45 to 54, and their balance is below both the $13,400 among Americans 65 to 74 and the $10,000 median balance held by Americans 75 and older.
This means only the youngest age groups have less than the typical 64-year-old. However, these younger Americans are in a better position despite having lower balances, as they have more years to save.
How can America’s seniors boost their savings?
Significant savings can provide an important financial cushion for those whose paychecks have already stopped or who will stop soon. Seniors need money for emergencies because if they’re on a fixed income, it can be harder to cope with surprise expenses without going into credit card debt.
Having three to six months of living expenses saved is just as important, if not more so, for older Americans who don’t have time to recover if an emergency depletes their financial cushion.
Since people in their 60s and 70s are likely to start relying on their investment accounts for income soon, it’s also a smart idea to have a few years of living expenses accessible in savings or other safe investments. This helps ensure that you don’t have to withdraw money from stocks during a market downturn.
Ultimately, the reality is that 64-year-olds with the average savings account balance may have some work to do. If they aren’t retired yet, it’s worth trying to increase their savings.
For those who have already stopped working, it’s worth looking at asset allocation. If you have plenty of money in investment accounts but very little liquid cash, it may be worth rebalancing and relocating some of those assets so you have a cushion in case of a market downturn. If possible, you want to avoid selling when stocks fall so you don’t lock in losses.
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