Older Americans Only Have $200,000 Saved for Retirement. Here’s How to Do Way Better

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If you want to live comfortably later in life, you need to save for retirement. The average retired worker on Social Security today only collects $1,924 per month in benefits. Since that’s not a lot of money to live on, you’ll need savings of your own to supplement.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Unfortunately, an estimated 20% of Americans aged 50 and over have no retirement savings, says AARP. And that perhaps explains why the median retirement savings balance among Americans aged 65 to 74 is only $200,000, according to the Federal Reserve.A $200,000 retirement account is certainly better than nothing. But if we apply a 4% withdrawal rate to that balance, which financial experts have long recommended, it amounts to $8,000 in annual income from savings, or about $667 per month.When we add $667 to the average $1,924 Social Security benefit, the total is about $2,600. You may be able to get by on that sum of money in retirement, but you can bet that it won’t buy you too many extras. And at a time when you’re not working, having almost no money available to pay for hobbies and entertainment isn’t a good thing.That’s why it pays to try to save well more than $200,000 for your retirement. And if you play your cards right, you can get there pretty easily.How to build a solid nest egg without breaking a sweatIt’s a big myth that you need to earn a lot of money to save a lot of money for retirement. If you start funding a retirement account early enough and invest your money for added growth, you may be surprised at how much wealth you’re able to build by the time you retire.But let’s not talk hypothetically. Let’s talk numbers.Imagine you earn $60,000 a year, so saving more than $3,000 a year, or 5%, just isn’t realistic. If you save and invest $250 a month (which amounts to $3,000 per year) in an IRA over a 30-year period, and your investments deliver a 10% yearly return during that time, you could end up with about $493,000, which is roughly 2.5 times what the typical older American has saved today.Now you may be thinking, “Well, sounds good, but how do I snag that 10% return in my IRA?”The truth is that a 10% return, or any return, is never guaranteed. But you should know that over the past 50 years, the S&P 500’s average annual return has been 10%, accounting for years when stock values climbed and years when stocks tanked.If you invest for retirement over an extended period, there’s a good chance you’ll earn a comparable return in your IRA. And you don’t even have to be a stock-picking whiz to make that happen. Simply load up on S&P 500 ETFs (exchange-traded funds), which basically let you invest in the stock market’s 500 largest companies.The key is to start youngIt’s possible to save well more than $200,000 for retirement if you start fairly young and go heavy on stocks. So if you haven’t begun saving for retirement yet, check out this list of the best IRAs and open one today.And if you can’t manage to put $250 a month into an IRA right now, save whatever amount you can afford. Maybe it’s $50 a month. Maybe it’s $25. The sooner you get started with some amount of consistent savings, the more wealth you stand to grow by the time your career comes to an end.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

If you want to live comfortably later in life, you need to save for retirement. The average retired worker on Social Security today only collects $1,924 per month in benefits. Since that’s not a lot of money to live on, you’ll need savings of your own to supplement.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Unfortunately, an estimated 20% of Americans aged 50 and over have no retirement savings, says AARP. And that perhaps explains why the median retirement savings balance among Americans aged 65 to 74 is only $200,000, according to the Federal Reserve.

A $200,000 retirement account is certainly better than nothing. But if we apply a 4% withdrawal rate to that balance, which financial experts have long recommended, it amounts to $8,000 in annual income from savings, or about $667 per month.

When we add $667 to the average $1,924 Social Security benefit, the total is about $2,600. You may be able to get by on that sum of money in retirement, but you can bet that it won’t buy you too many extras. And at a time when you’re not working, having almost no money available to pay for hobbies and entertainment isn’t a good thing.

That’s why it pays to try to save well more than $200,000 for your retirement. And if you play your cards right, you can get there pretty easily.

How to build a solid nest egg without breaking a sweat

It’s a big myth that you need to earn a lot of money to save a lot of money for retirement. If you start funding a retirement account early enough and invest your money for added growth, you may be surprised at how much wealth you’re able to build by the time you retire.

But let’s not talk hypothetically. Let’s talk numbers.

Imagine you earn $60,000 a year, so saving more than $3,000 a year, or 5%, just isn’t realistic. If you save and invest $250 a month (which amounts to $3,000 per year) in an IRA over a 30-year period, and your investments deliver a 10% yearly return during that time, you could end up with about $493,000, which is roughly 2.5 times what the typical older American has saved today.

Now you may be thinking, “Well, sounds good, but how do I snag that 10% return in my IRA?”

The truth is that a 10% return, or any return, is never guaranteed. But you should know that over the past 50 years, the S&P 500’s average annual return has been 10%, accounting for years when stock values climbed and years when stocks tanked.

If you invest for retirement over an extended period, there’s a good chance you’ll earn a comparable return in your IRA. And you don’t even have to be a stock-picking whiz to make that happen. Simply load up on S&P 500 ETFs (exchange-traded funds), which basically let you invest in the stock market’s 500 largest companies.

The key is to start young

It’s possible to save well more than $200,000 for retirement if you start fairly young and go heavy on stocks. So if you haven’t begun saving for retirement yet, check out this list of the best IRAs and open one today.

And if you can’t manage to put $250 a month into an IRA right now, save whatever amount you can afford. Maybe it’s $50 a month. Maybe it’s $25. The sooner you get started with some amount of consistent savings, the more wealth you stand to grow by the time your career comes to an end.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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