How Much Is the Average Investor Saving for Retirement Each Month?
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Gabrielle Olya
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Gary Dudak
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Whether you’re planning to retire in the near — or not-so-near — future, contributing to your retirement savings regularly is essential to ensure that you have a healthy nest egg in place when it comes time to leave the workforce. But you may not know how much you should be contributing to your long-term savings.
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To help you gauge if you are contributing enough or falling behind, here’s a look at how much the average investor is saving for retirement each month.
The Average Investor Contributes Roughly $500 Each Month to Retirement Savings
A recent Empower survey of over 1,000 stock owners found that the average investor contributes $480 each month to their retirement accounts, which can include employer-sponsored plans or IRAs.
While this can be a good general number to keep in mind, it’s important to note that the amount you should be contributing may be more or less.
“Savings is a metric that should be evaluated on a relative basis and determined based on your personal financial goals,” said Keith Jones, senior financial advisor at Empower. “One of the simplest rules of thumb for savings is to try and target about 20% of your income each year.”
Gen X Investors Contribute More Than Average, While Gen Z Investors Contribute About Half as Much
The Empower survey found that the average Gen X investor contributes $579 each month to their retirement accounts, while the average Gen Z investor contributes $252.
Once again, your individual circumstances matter more than your age when it comes to determining your ideal retirement savings contribution, but it is generally a good idea to increase contributions as your income increases.
“For one person, saving $579 a month may be amazing and for others, it may be lacking,” said Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth. “What does make sense from the research is that as people get older, they are saving more. This is very common. The earlier you invest, the more it can grow, but we tend to have a lower income earlier in life. The key is to track how much you save, and hopefully save more each year. Don’t worry about the exact number, but focus on incremental growth over time.”
How To Determine Your Ideal Monthly Contribution
To figure out how much you should be contributing to your retirement savings each month, keep a broad view of your overall financial picture and goals.
“The main factors to consider include determining when you want to retire, how much time there is for your money to grow until then and how much money you want to spend in retirement,” Jones said. “Saving 20% of your income each year could be helpful for those who want to live a similar lifestyle in retirement. For those who want to travel significantly in retirement, it may be worth considering saving more now to splurge on those experiences down the road.”
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