How much money do Americans have in their IRAs on average in 2024?

Individual Retirement Accounts (IRAs) are a cornerstone of retirement planning for many Americans. These tax-advantaged accounts allow individuals to save for their golden years with the benefit of tax deductions or tax-free growth. But how much are Americans actually saving in their IRAs?

The median average saved in IRAs

The median average, unlike the mean, represents the middle point in a data set, offering a more accurate picture when dealing with skewed distributions. The Motley Fool’s study suggests a median retirement savings amount of around $87,000 for American households, though this uses the most recent data for 2022.

However, it’s crucial to note that this is a median value. Half of Americans have more than $87,000 saved, while the other half falls below that mark. The actual distribution of IRA balances likely skews even further, with a significant portion holding smaller balances. Indeed, The median retirement savings of white Americans was $100,000 while other ethnic groups had much less. Black families saved $39,000 on average while Hispanic families saved $55,600.

A survey by GOBankingRates shows this skew. Nearly half of respondents reported having just $500 or less in their savings accounts. The survey of 1,063 US adults revealed a significant lack of savings across the board. Only 29% of respondees had between $501 and $5,000 saved, while a mere 21% have savings exceeding $5,001.

Why the mean average is not useful

The same dataset used by The Motley Fool shows the mean retirement savings equates to $333,945. However, the mean average is not best suited for this average. The difference between the median and mean in retirement savings data can be significant. This discrepancy often arises because a small percentage of individuals might hold very large retirement accounts, skewing the average upwards. The median, on the other hand, provides a better sense of the “typical” American’s retirement savings.