If you are approaching 85, you may be wondering whether the money left in your retirement nest egg is enough after years of withdrawals. One way to gauge your position is to compare your savings with what others in your age group have accumulated.
Here is a closer look at the average and median retirement balances for older Americans, plus a more practical way to think about those numbers. The result may be more reassuring than you expect.
What the average retirement balance shows
The Federal Reserve's Survey of Consumer Finances puts the average household retirement-account balance at $798,710 for the 75-and-older age group. That figure does not isolate 85-year-olds, but it is the closest benchmark available.
The median balance is far lower: $257,000. Median means half of households with retirement accounts have more and half have less, so this figure may give a more grounded sense of what a typical older saver has on hand.
What counts as a retirement account
These figures include only households that still have retirement accounts, and roughly 45% of households in this age group do.
The survey covers accounts such as IRAs and workplace plans including 401(k)s, 403(b)s, and thrift savings accounts. It does not include pension income or home equity, even though many older adults may still rely on those assets.
Age and stage matter
It is natural to wonder whether savings will last through the rest of life, but someone at 85 will often have less in retirement accounts than someone at 65. There are several reasons for that.
For one thing, an 85-year-old may have been drawing from those accounts for two decades. Even if investment returns and inflation have not matched each other perfectly, the savings may already have done their job by supporting retirement living.
The Congressional Research Service has also pointed to broader access to traditional pensions and the possible depletion of earlier savings as reasons older households are less likely to still hold retirement accounts.
Cash flow matters more than a balance sheet snapshot
The median balance can be a useful reference point, but monthly expenses are more important. It helps to compare essential costs such as housing, medical care, food, transportation, taxes, utilities, and debt payments with dependable income, including Social Security. That approach is more useful because it reflects your actual cost of living rather than a national average.
Social Security provides a steady income base, and pensions or annuity payments can reduce how much a household needs to withdraw from savings. Still, Social Security remains the most common source of retirement income among households age 65 and older.
Long-term care can quickly change the picture
If long-term care has already become part of your life, you may have seen its impact on the budget. Long-term care includes medical and nonmedical support, but most of it involves help with daily tasks such as bathing, dressing, and eating. It is different from skilled nursing facility care.
Because Medicare and Medigap generally do not pay for nonmedical long-term care, those costs can add up quickly. A retirement account that once seemed comfortable can feel much tighter once those expenses begin.
RMDs are not a spending target
A withdrawal rule that made sense at the start of a 30-year retirement may no longer fit in the mid-80s. Financial professionals often recommend reviewing assets and spending needs every year. That plan should take into account life expectancy, changing health conditions, and the possible loss of a spouse.
Required minimum distributions are a tax rule, not a measure of how much a household can safely spend. Withdrawals from traditional accounts generally count as taxable income. Retirees should look at after-tax income together with Social Security and decide whether they actually need to spend every dollar withdrawn. If the money is not needed, it does not have to be fully consumed.
Get your financial affairs organized
If you have not done so already, the mid-80s are a good time to review estate plans, beneficiary designations, end-of-life preferences, and account settings. You may need one plan for your current circumstances and another for what happens after you or a spouse dies. The goal is to make those plans as easy as possible for loved ones to carry out.
Keep important documents in a secure place that executors can access. Also, understand the difference between authorized account access and a trusted contact. A trusted contact cannot make transactions, while a financial power of attorney can be given decision-making authority. Knowing how each role works is just as important as choosing the right people.
The bottom line
Reaching 85 is an accomplishment worth celebrating, no matter the size of a retirement account. Still, if you want to know whether your money can support you for the rest of your life, an annual review is wise. Do not focus only on the $257,000 median balance and overlook the other smart financial moves older adults should consider.
Instead, weigh total income, assets, health care needs, and how much you hope to leave behind. At this stage, many people must balance their own comfort with the desire to pass on wealth. A financial professional can help sort through those choices.
FAQs
Does having less than the median mean you are behind on retirement savings?
Not necessarily. A person with a pension, low housing costs, and little debt may need less savings than someone with higher expenses. The median is a comparison point, not a minimum standard for a secure retirement.
What should you do if your retirement savings are running low at 85?
Begin by comparing essential monthly costs with dependable income to see whether there is a gap. Review recurring expenses and possible help with food, utilities, and health care. A financial professional can help you evaluate withdrawals and prepare for future care needs.
Does Medicare cover long-term care at 85?
Medicare generally does not cover ongoing help with daily activities such as bathing, dressing, and eating. It may cover some short-term skilled nursing care when eligibility rules are met. Long-term care costs should be included in your retirement budget.
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