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How Does Your Nest Egg Compare to the Average American?

Find out how you match up to peers and learn how to build, grow, and protect your financial future.

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Updated Nov. 7, 2024
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If you have money saved and invested to help reach future goals, you might wonder how the size of your nest egg compares to the savings your peers have tucked away.

Knowing how much you have saved compared to others can help you determine whether you're on track to maximize your retirement savings.

The Federal Reserve’s 2022 Survey of Consumer Finances is the most recent report to detail the average amount of retirement savings by age. Let’s see how you compare to others in the race to build a big nest egg.

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What is a nest egg?

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A nest egg is a substantial pool of savings or investments that is earmarked for a future financial goal. Usually, this is retirement, but it can also be something like buying a home or funding an education.

Having a nest egg requires you to set aside money that will grow over time and provide a sense of financial security.

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How does your nest egg compare?

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The size of a nest egg can vary depending on a person’s ability to save, as well as their income, expenses, financial goals, and investment choices. 

Considering how your nest egg compares to others in your age bracket can help you recognize if you are on the right track.

According to the Federal Reserve’s survey, these are the average retirement savings amounts by age:

  • Under 35: $49,130
  • 35 to 44: $141,520
  • 45 to 54: $313,220
  • 55 to 64: $537,560
  • 65 to 74: $609,230
  • 75 and older: $462,410

If you feel like you aren’t where you should be according to your age, there are ways to get closer to your goal. Here are some ways to build a solid nest egg.

Use tax-advantaged retirement accounts

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Tax-advantaged retirement accounts save you money on taxes, helping you build a larger nest egg.

The 401(k) is probably the most famous example of a tax-advantaged retirement account. Millions of Americans are enrolled in one of these accounts through their employer. 

In many cases, employers will help you to boost the money in this account by matching a certain percentage of your contributions.

Other tax-advantaged retirement accounts include IRAs, 403(b) plans, and even health savings accounts (HSAs). The tax savings that come with these plans are meant to encourage people to save for retirement.

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Make sure to diversify your investments

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Diversifying your investments helps you avoid the big losses that can come from investing in one type of asset. When you hold many different investments, you won’t lose all of your money if one of them goes south.

You can easily diversify your investments by purchasing a combination of stock, bonds, and real estate and keeping some money in cash. 

You can diversify your stock holdings further by purchasing an index mutual fund or exchange-traded fund (ETF) that gives you investments in hundreds of companies.

Stay consistent with your investing

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Building a nest egg requires consistency. That means investing regularly, whether the market is up or down.

Regularly putting money into a savings or investment account means that cash will compound year after year.

Staying consistent with your investing encourages financial discipline. Setting up automatic contributions is a great way to ensure consistency.

What to do if your savings are below average

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If your savings are below average, remember it’s never too late to build a solid nest egg. If you're struggling to find money to save, review your budget and look for ways to cut costs.

Once you have made the changes necessary to boost your savings, think about your goals for this extra money. You might want to start there if you don’t have an emergency fund.

After establishing an emergency fund, it’s time to start saving for other long-term goals. Automate your savings efforts, so you regularly earmark cash for savings and investment accounts.

Practice patience as you build your nest egg. It will take time, but years from now, you will be glad you made the effort.

What to do if your savings are above average

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If you have above-average savings, you are in a fortunate position. Now, you might want to focus on protecting and growing your nest egg.

Continue contributing to your nest egg so it grows bigger over time. Use tax-advantaged accounts to strengthen your financial foundation.

With your above-average savings, you might even be able to make catch-up contributions to your retirement accounts if you are 50 or older.

Once you start withdrawing funds from retirement accounts, make sure you do so correctly. Understanding the rules for withdrawing funds from such accounts is essential for avoiding penalties.

For instance, you will generally face a penalty if you withdraw from an IRA or a 401(k) before you have reached the age of 59½. In addition, remember that you will have to make the required minimum distributions once you turn 73.

Bottom line

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A nest egg helps you reach long-term financial goals. The money should grow over time, providing you with security and allowing you to get ahead financially.

Inflation can decrease the value of your savings, but investing in stocks or real estate preserves capital and gives you a fighting chance of keeping up with rising living costs.

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Author Details

Sarah Barkley

Sarah Barkley is a writer from Michigan with a bachelor’s degree from Baker College. With a strong interest in saving and financial planning, she enjoys discussing finances through a practical, family-focused lens. She often explores how significant life changes, like having children, impact household budgets and offers creative ideas to help families save money.