You may already know what you hoped to have set aside by the time you retired, but what amount is reasonable once you've been retired for years? That is the question many people in their mid-80s, or their adult children, may be asking, especially if they are worried about a nest egg that is shrinking fast.
Below is a national savings benchmark, along with other factors that belong in a complete retirement plan. Use the figures and related context to judge how your own finances compare for your age and stage of retirement.
Average and median retirement balances
The latest Survey of Consumer Finances found that households age 75 and older that owned retirement accounts had an average balance of $798,710. If that sounds unusually high, the median figure may be more useful because it is less influenced by very large balances. The median was $257,000, meaning half of these households had more and half had less.
These figures are not specific to 86-year-olds, since the data is grouped by age range. Still, the 75-and-older category includes people in that age band, so it offers a broad comparison rather than a precise personal target.
Most households at this age do not have a retirement account
The balance figures also apply to entire households and may reflect both spouses' retirement accounts. Households without retirement accounts were not included in the balance calculation. In the latest data, only 44.6% of households headed by someone 75 or older had a retirement account.
That does not necessarily mean these households have nothing to live on in later life. More context matters, and that comes next.
Small balances can reflect years of withdrawals
Retirees may have smaller balances simply because they have been using those accounts as intended, and that is not automatically a problem.
Whether retirees need the money they withdraw depends on their individual situation. Required minimum distributions, or RMDs, are not based on whether the funds are needed for living costs; retirees must still take the required amount from eligible accounts. Any money not needed for spending can be saved or reinvested outside the retirement account.
It is also worth remembering that the SCF provides a snapshot of different age groups at one point in time. It does not track the same households over time, so it does not prove that every household's retirement balance declines as it ages.
Other parts of the financial picture matter more later in life
It would be a mistake to overlook the role Social Security plays in a retiree's budget, which is why a lower retirement account balance does not tell the full story. Benefits can rise through cost-of-living adjustments, or COLAs, based on a federal inflation measure, though those increases may not match a person's actual expenses.
Other assets matter too. A home that has been paid off can provide stability because there is no rent or mortgage payment to cover. There are still property taxes, insurance, and upkeep to account for, and those costs should be part of the larger picture of savings, income, and spending.
Rather than focusing only on retirement accounts, older adults should ask how much those savings really need to cover after Social Security and other income are considered, including any gaps caused by rising bills.
Long-term care can change everything
Budget needs can look very different for an 86-year-old who lives independently compared with someone who needs constant personal help or nursing care. Some people this age fall somewhere between those two situations and begin to rely on more services as their needs change.
Medicare does not pay for long-term custodial care, such as help with bathing, dressing, and other daily tasks, whether that care is provided at home or in an assisted living or nursing facility. Medicare may cover short-term skilled nursing care if it qualifies, but that is not the same as ongoing custodial care. Unless seniors qualify for Medicaid or have other protection, such as long-term care insurance, they may have to pay these often costly bills themselves.
That expense may matter more than almost anything else when discussing retirement account balances.
Make finances easier to manage before there is a crisis
Age 86 is a good time to make sure estate plans and care preferences are in order if they are not already. With the help of a trusted and authorized family member, review these key items:
- List all retirement and bank accounts, insurance policies, income sources, and recurring bills. Make sure someone can pay expenses if you become ill or unable to manage things by granting access that can be used if needed.
- Look over accounts that are spread across different institutions and consider whether consolidation would make management easier both now and for heirs later.
- Review primary and contingent beneficiary designations and make sure everyone involved understands what is required. Inherited retirement accounts come with distribution rules, so accurate beneficiary information is especially important.
Put estate documents in order
Find and review your estate-planning documents with a professional, and talk about durable financial power of attorney, health care power of attorney, and who can make decisions if you are unable to do so.
These steps may not change your numbers immediately, but any shift in health or finances can make them important very quickly. Planning ahead can reduce stress for you and your loved ones and help ensure your wishes are more likely to be followed.
Bottom line
The retirement account data for households age 75 and older includes people in their 80s, but it does not set a single balance that guarantees financial security. A better approach is to look at income, expenses, and what can be done now to avoid costly or disruptive mistakes later in life.
If finances become tight, look into senior benefits that may be available. The National Council on Aging estimates that eligible older adults left $58 billion in benefits unclaimed across SNAP, SSI, and Medicare Savings Programs. If you need help, check your eligibility through BenefitsCheckUp so you can remain financially stable through your 80s and beyond.
FAQs
Does a smaller retirement account mean I'm running out of money?
Not necessarily. A smaller balance may simply reflect years of planned withdrawals. Retirement accounts are only one part of the overall financial picture. Other savings, income sources, and the amount you need to withdraw to cover expenses all matter.
What is the difference between retirement savings and net worth?
Retirement savings usually refers to money set aside for retirement, including retirement accounts. Net worth is the value of all assets, including a home, minus debts. Home equity can support financial security, but it is not easy to use for everyday bills.
How can I catch up if my retirement savings are low at age 86?
Start by comparing essential expenses with Social Security and other dependable income to find any gap. Look for bills you can trim and see whether you qualify for assistance with food, health care, or utilities. A trusted financial professional can help review withdrawal options and plan for care costs without taking on more investment risk than you can handle.
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