What the Typical 75-Year-Old American Has Saved for Retirement

Although retirement saving can span decades, balances often reach their highest point in the early to mid-60s. Many people retire around then and gradually draw down those funds over the rest of their lives.

That is how a conventional retirement plan is supposed to work, which also means a 75-year-old will usually have less saved than someone who is 50, 55, or even 60. So what does the typical account balance look like at age 75? Here’s a look at the numbers, along with ways to judge whether you may need to adjust your plan for later life.

The average savings of people age 75 and older

According to the Federal Reserve’s Survey of Consumer Finances, households headed by someone age 75 or older had average retirement savings of about $798,710. That figure includes 401(k)s, IRAs, and other retirement-focused accounts.

Because it is an average, the number reflects the total across all households divided by the number of households. It therefore includes both people with very large balances and those with little or nothing saved.

Why the median may tell a better story

The median is often more useful than the average because it shows the middle point: half of households have more, and half have less. For households headed by someone 75 or older, the median retirement account balance is $257,000, according to the Federal Reserve’s Survey of Consumer Finances.

That is well below the $798,710 average. The difference happens because a relatively small number of very large accounts pull the average upward, while the median is not skewed by extreme outliers. For most retirees, the median can be the more realistic reference point.

Why balances often peak before age 75

Seen on its own, the $257,000 median may not seem like much. But it reflects a basic reality of retirement: by this age, many households have already spent a significant share of their savings.

Balances commonly peak sometime between ages 65 and 74. By 75, many people have been living off those assets for nearly a decade. At that stage, most are well past the wealth-building phase and are actively using retirement accounts, often along with Social Security, to cover everyday expenses.

Why accounts shrink in the 70s

It is normal for balances to fall later in life, in part because many people are no longer working, or are working less. By the mid-70s, withdrawals are also influenced by required minimum distributions, since the IRS mandates yearly draws from tax-deferred accounts once RMD age is reached. In other words, this is how retirement spending is meant to function.

Common reasons balances decline in the 70s include:

• Required minimum distributions from traditional IRAs and 401(k) plans
• Higher health care and long-term care expenses
• Market swings in some cases

This is a planned drawdown period. Using savings is part of the strategy.

What the headline numbers do not show

Retirement account balances do not reveal how far that money has to stretch. Two households can look very different when considering what else they have going for them, including:

• Total debt, such as balances on cars or homes
• The value of real estate
• Future Social Security income
• Income from pensions or annuity-like sources

Other factors matter too, such as whether long-term care will be needed or whether someone can live with family in later years. A simple rule of thumb about retirement savings cannot capture those realities.

The benchmark that matters most

A solid retirement plan focuses less on broad averages and more on whether your income covers your spending. If your money coming in is enough to pay your bills now and in the years ahead, the exact balance in your accounts matters less than many people think.

To check that, total up reliable monthly income from savings, investments, pensions, Social Security, and any side work, then compare it with monthly expenses. Also leave room for unexpected medical bills or home repairs. If you consistently have money left over, your situation may be healthier than the raw average suggests.

If your savings seem low

National averages can still be useful because they prompt a closer look at your own finances. If your numbers appear too low to support the retirement you want, there may still be time to make changes. Consider reducing discretionary costs first, such as gifts to adult children, travel, or restaurant spending, before cutting essentials like prescription medications.

You may also want to review withdrawals with a fiduciary financial planner to see whether a tax strategy could improve your results. Deciding which accounts to tap first — taxable, tax-deferred, or Roth — can make a meaningful difference.

The bottom line

Whether you are closer to the average of $798,710 or the median of $257,000, the main idea is the same: balances are generally meant to come down in older age. Financial concern is usually warranted only if your income falls well short of what you need to last throughout retirement.

Reviewing your Medicare coverage, medical needs, account balances, and expected income each year can help you make smart decisions for a long retirement. Think of it as a financial checkup — and as a reason to appreciate another year in retirement.

FAQs

What is the RMD age?

For most people now in their 70s, the required minimum distribution age is 73. It is scheduled to rise to 75 in 2033 for people born in 1960 or later. Missing an RMD or taking too little can trigger a tax penalty of 25% on the amount that should have been withdrawn, though that penalty can fall to 10% if the shortfall is corrected quickly.

Do retirement account withdrawals at 75 still get taxed?

Yes. Withdrawals from traditional 401(k)s and IRAs are taxed as ordinary income regardless of age, including required minimum distributions. Withdrawals from Roth accounts are generally tax-free if the account satisfies IRS holding-period rules.

What is the average Social Security check for someone age 75?

The average Social Security benefit for people age 75 and older is about $2,231 per month, or more than $26,000 per year, according to Kiplinger. Nearly 93% of Americans in this age group receive Social Security, making it one of the most common retirement income sources at this stage of life, according to the Pew Research Center.

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