Average vs. Median: Understanding the Difference
When discussing retirement savings, the terms 'average' and 'median' are often used interchangeably, but they represent very different pictures of financial health. The average, or mean, is calculated by summing all balances and dividing by the number of savers. This figure can be significantly inflated by a small number of extremely high-balance accounts. The median, on the other hand, is the midpoint figure, where half of savers have more and half have less. This makes the median a much more accurate representation of what the typical 60-year-old has saved.
For example, recent data from Empower shows the average retirement balance for those in their 60s is $1,148,441, but the median is $539,068. The Federal Reserve's 2022 data for households aged 55-64 reported an even lower median household retirement savings figure of $185,000. This disparity is a key reason why comparing your savings to a national average can be misleading and demoralizing. It is far more useful to focus on your personal financial goals and readiness.
What Accounts for the Variance in Reported Averages?
The wide range of figures reported by different financial institutions can be confusing. This variance is largely due to differences in data sources and what is included in the calculation. Some analyses, like those from Empower, use data from aggregated retirement accounts, including 401(k)s, IRAs, and other retirement vehicles. Other reports, such as those focusing solely on 401(k) balances, show lower numbers. For instance, Investopedia reported an average 401(k) balance for the 60-64 age group of $246,500 in 2024, which is just one piece of a person's total retirement picture.
Here's a comparison of recent average and median retirement savings by age, showing how the numbers differ based on the source:
| Age Range | Empower (Jun 2025) Average All Accounts | Empower (Jun 2025) Median All Accounts | Federal Reserve (2022) Average Household Retirement Savings | Federal Reserve (2022) Median Household Retirement Savings |
|---|---|---|---|---|
| 60s | $1,148,441 | $539,068 | N/A (55-64: $537,560; 65-74: $609,230) | N/A (55-64: $185,000; 65-74: $200,000) |
| 50s | $970,570 | $441,611 | N/A (45-54: $313,220) | N/A (45-54: $115,000) |
| 40s | $545,424 | $213,645 | N/A (35-44: $141,520) | N/A (35-44: $45,000) |
Note: Federal Reserve data combines broader age ranges, and Empower's figures are based on users of its financial dashboard, who may be more engaged savers.
Why Your Personal Number Matters More Than the Average
Rather than obsessing over national statistics, your focus in your 60s should be on your personal retirement readiness. Your specific financial needs are determined by several factors, including:
- Desired retirement lifestyle: Do you plan to travel extensively or enjoy a more relaxed life at home?
- Income replacement goal: Many experts recommend aiming to replace 75-85% of your pre-retirement income, but this can vary depending on your debt and expenses.
- Other income sources: Social Security, pensions, and other investment accounts should be factored into your total retirement income plan.
- Mortgage status and debt: Entering retirement debt-free, especially without a mortgage, can dramatically reduce your required savings.
- Healthcare costs: With Medicare typically starting at age 65, you must plan for healthcare expenses in your early 60s and beyond, as these costs often rise in retirement.
- Longevity: A longer life expectancy means your savings must last longer. Those retiring earlier at 60 may need their funds to last 30 or 40 years.
Key Financial Considerations for 60-Year-Olds
As you approach retirement in your 60s, a few critical financial moves can significantly impact your financial security. Taking proactive steps can help you bridge any gaps between your current savings and your retirement goals.
Here are a few strategies to consider:
- Maximize Catch-Up Contributions: For 2025, those aged 50 or older can contribute an extra $7,500 to a 401(k), and those aged 60-63 can contribute an extra $11,250. Maxing these out can accelerate your savings.
- Delay Social Security: While you can claim benefits as early as 62, waiting until your full retirement age (66 or 67) or even 70 can result in significantly larger monthly payments for life.
- Review Asset Allocation: As retirement nears, it's wise to review your investment portfolio to ensure your asset allocation aligns with your risk tolerance. Many advisors suggest gradually shifting towards more conservative assets, though some may choose to maintain a higher growth allocation to make up for lost time.
- Create a Withdrawal Strategy: Work with a financial advisor to determine a sustainable withdrawal rate. The classic 4% rule suggests withdrawing 4% of your portfolio in the first year of retirement, adjusted for inflation annually.
- Plan for Healthcare Costs: Research potential healthcare expenses, including insurance premiums, deductibles, and out-of-pocket costs before and after qualifying for Medicare. Long-term care insurance is also a significant consideration.
Retirement Milestones: A Better Benchmark Than Averages
Instead of comparing your balance to the average, financial institutions like Fidelity and T. Rowe Price offer a more personalized guideline based on your income. Fidelity suggests having 8 times your annual salary saved by age 60, and 10 times by age 67. While these are still just guidelines, they provide a more relevant target than an aggregate population average, and focus on the income replacement ratio you will need.
The Bottom Line on Preparing for Retirement
While knowing what is the average balance for a 60 year old? provides some context, it should not dictate your financial strategy. The vast difference between the average and median figures highlights the importance of individual planning. Focus on your specific financial needs, future expenses, and desired lifestyle to determine your own retirement number. By making catch-up contributions, strategically planning Social Security benefits, and creating a thoughtful withdrawal strategy, you can confidently prepare for the next chapter of your life, regardless of where your balance falls relative to the national average. For personalized guidance on your retirement plan, consider consulting a financial advisor. An advisor can help you create a roadmap that reflects your unique circumstances and goals.
Final Conclusion
The average balance for a 60-year-old can be misleading due to the influence of high earners. While some reports show an average well over $1 million, a more realistic median figure is significantly lower. The most prudent approach for anyone in their 60s is to focus on a personalized retirement plan that considers all sources of income and accounts for anticipated expenses, especially healthcare costs. Rather than comparing yourself to broad averages, leverage your final working years to maximize savings through catch-up contributions and informed financial decisions, ensuring your retirement is secure on your own terms.
