The top 10% lead different lives compared to the rest of us. Many average workers are struggling to set aside any money for retirement amid rising bills and competing priorities. In fact, for those in the 25th to 49.9th percentile by net worth, median retirement savings was just $22,380 in 2022, according to a Motley Fool report.
But the wealthiest Americans often have an easier time reaching their retirement goals. Here's a closer look at how much the top 10% have saved for retirement.
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Here's the median retirement account balance of the top 10%
The top 10% of Americans by net worth had a median retirement account balance of $900,000 as of 2022. Note this is the median, not the average, which can be skewed by particularly high or low numbers. That's the case here as the average retirement account balance for the top 10% was close to $1.3 million in 2022.
These are already big numbers, but perhaps what's even more shocking is how quickly median savings among these high earners has increased over the last few decades. Thirty-five years ago, the top 10% had just $110,668 saved (in 2022 dollars). Since then, they've seen their median savings grow by $789,332 -- that's over a 700% increase.
Meanwhile, those in the bottom 25% have seen their median retirement savings rise from just $2,306 in 1989 (in 2022 dollars) to $6,000 in 2022. Though it represents a 160% increase, it hasn't had a significant effect on this group's retirement readiness.
How to increase your retirement savings
Most Americans won't see retirement account balances close to what the top 10% have, but it's still important to set aside as much as possible to give yourself the best shot at a comfortable future.
Regular contributions are key. Even if you can only set aide a few dollars per month, start there. Then, aim to increase your contributions by some percentage of your salary each year or whenever you get a raise.
If you qualify for a 401(k) match, do your best to claim this each year if you can afford it. Once you've gotten the full match from your employer, you can switch to the retirement account you believe offers you the best benefits. For example, if you expect your income will be roughly the same or higher in retirement, you might want to put your cash in a Roth account so you can enjoy tax-free retirement withdrawals.
Those who really don't think they'll be able to save as much as they need may have to explore other options. You might consider working part-time in retirement or delaying it to give yourself additional time to save.
You can't know exactly how much you'll end up setting aside for retirement or how much your savings will grow. So, retirement plans have to be able to adapt over time. Having savings goals is great, but make sure you set aside time to review those goals at least annually to make sure they're still adequate for your needs.
