Did you know?
In the first quarter of 2024, Brazilian households Average Savings by Age 16.2% of the country’s Gross Domestic Product (GDP).
Although this was a slight drop from 17.5% in the same quarter of the previous year, it’s clear that savings still play a crucial role in Brazil’s economy.
During this time, Brazil’s capital investments also represented around 17% of its GDP.
Saving money is a vital part of financial planning, but many people struggle with it, especially those living paycheck to paycheck.
So, how do you know if you’re saving enough? One way to measure your progress is to compare yourself to others in your age group.
If you find that you’re saving less than your peers, it could be a sign that you need to re-evaluate your spending and saving habits.
Understanding Savings
Savings refer to any leftover money from your paycheck after you’ve covered all your expenses, like rent, groceries, and bills.
This money can then be set aside for future financial goals, such as buying a house, starting a business, or retirement.
While investing your savings can help them grow, there is always a risk of losing money.
In this discussion, “savings” will refer to cash or cash equivalents, like money kept in a bank, which offer lower returns but are generally safe from loss (except for inflation).
Average Savings by Age Group
Here’s a breakdown of the average transaction account balances by age group, based on a survey from 2019:
Under 35
The average account balance for people younger than 35 is $11,250, the lowest among all age groups.
This group is challenging to assess because it includes both teenagers and young adults who may have been working for more than a decade.
However, it’s common for people in this age range to have lower savings due to student loans or entry-level wages.
Ages 35–44
Those in this age group have an average savings of $27,910.
While this group earns higher wages than the under-35 group, they also tend to have more expenses, such as childcare, taxes, and mortgages.
Savings in this age group have shown steady growth, despite occasional dips.
Ages 45–54
With an average account balance of $48,200, people aged 45 to 54 have typically seen their savings grow steadily, with a few exceptions.
At this stage, many have paid off student loans and are more focused on saving for retirement, though those with children may be diverting savings to cover education costs.
Ages 55–64
At $57,670, this age group has the second-highest average savings. As retirement nears, many people in this age bracket focus heavily on building up their savings.
They may have fewer financial responsibilities, allowing them to allocate more funds toward their retirement goals.
Ages 65–74
The 65–74 age group tops the list, with an average balance of $60,410. At this point, most individuals are either retired or nearing retirement.
Their savings have likely reached their peak as they shift from earning wages to relying on savings and pensions.
Ages 75 and Older
This group has an average balance of $55,320. Savings for people in this age range can be unpredictable, as they may draw on their accounts to cover healthcare and living expenses during retirement.
While their savings peaked in 2004, they have remained relatively stable since 2013.
How Much Should You Keep in Savings?
Determining how much to keep in savings can be tricky. Everyone’s financial situation is different.
While it might sound appealing to save as much as possible, there are limits to how much you should keep in any one place.
For example, the Federal Deposit Insurance Corp. (FDIC) only insures deposits up to $250,000 per bank account.
Also, keep in mind that most retirement accounts have penalties for early withdrawal, so they aren’t as easily accessible as regular savings.
Final Thoughts
No matter your age, it’s never too late to start saving.
You might have to make up for lost time by cutting unnecessary expenses, finding ways to earn extra income, and researching retirement accounts that suit your needs.
Remember, a little effort today can lead to significant financial security in the future.
