Are you curious about how your financial standing measures up against the average middle-class American? The Transamerica Center for Retirement Studies has shed light on the diversified sources of retirement income that people in middle-class households expect. Let’s delve into the details of the average cash, savings, and home equity balances in the United States.
Total Savings
Recent findings as of late 2023 reveal that middle-class retirees reported an estimated median of $186,000 in total household savings excluding home equity. Interestingly, savings tend to rise with the income bracket. Households earning between $50,000 to $99,000 accumulate around $120,000 in total savings, in contrast to those earning $100,000 to $199,000 who save approximately $349,000 on average.
Cash and Cash Accounts
Maintaining money in cash accounts allocated for short-term living expenses and emergencies is crucial for financial preparedness. It’s recommended to have an emergency fund equivalent to at least 3-6 months of living expenses to cover unexpected financial setbacks. Transamerica suggests that individuals in the middle class typically have $8,000 in emergency savings.
Health Care Savings
A significant 74% of middle-class individuals are diligently saving for future health care expenses. Among the numerous saving methods utilized are individual accounts (e.g., savings, checking, brokerage, etc.), health savings accounts (HSA), flexible spending accounts (FSA), and other means. According to the Employee Benefit Research Institute (ERBI), balances in HSAs are on an upward trend, despite remaining relatively low.
Home Equity: 66% of Americans Own Their Home
Home equity holds substantial importance in building household wealth, with figures growing significantly as individuals age. For middle-class households, the estimated median home equity stands around $177,000. Home equity escalates alongside household income, indicating a positive correlation.
Average Retirement Savings
Retirement accounts are pivotal components of future financial stability, with the middle-class median retirement savings reported at $66,000. Consistent contributions to retirement accounts such as IRAs and employer-sponsored plans like 401(k)s are recommended for long-term financial security.
The Most Valuable Asset? A Plan! Only Done by 18% of Americans
Despite the statistics showcasing the average financial standings across various categories, what truly sets individuals apart is having a well-structured and comprehensive retirement plan. Shockingly, only a mere 18% of Americans possess a documented retirement plan. A written plan is essential for optimizing financial resources and ensuring a financially secure retirement.
Are you ready to take charge of your financial future? Embrace the Boldin Retirement Planner to develop a strategic retirement plan that aligns with your goals and aspirations. Elevate your financial acumen, enhance wealth accumulation, and pave the way towards a prosperous retirement filled with happiness and security.
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