Property · Union Post UK
When asked, Americans express a preference for keeping their personal finances private - including details of individual retirement accounts. But there are ways to gain insight into others’ retirement savings, thanks to financial firms that publish IRA balance averages and medians for different age demographics in the U.S. IRAs typically come in two types: traditional and Roth.
The former offers tax breaks on contributions, while the latter offers tax breaks on withdrawals, according to Fidelity . “Looking at average and median IRA balances by age can help you understand how your savings compare - especially since balances can differ significantly depending on contribution habits, investment growth, and account type,” Empower notes in a 2026 analysis. For both types of IRA, average balances vary widely by age group but specific trends do show up.
IRAs can be a powerful retirement savings tool when used correctly, experts say (Getty) Average vs. median When looking at IRA balances, it helps to understand the difference between average and median: The average is the total value of IRA balances of all ages divided by the number of people with IRAs The median is the middle number, where half of IRA balances fall under the number and half are above. Accounts with extremely high or low balances don’t influence the median so it tends to be a more accurate picture. Assessing averages When all age groups are considered, the average IRA balance in America is $281,280, according to Empower.
The average balance for those in their 20s is ($46,107); 30s ($88,291); and 40s ($215,206). Meanwhile, those over 50 have balances above the national average: 50s: $483,451 60s: $716,661 70s: $712,572 80s: $593,911. This makes sense as IRAs tend to grow more quickly as people get older for several reasons.
Firstly, compound interest - returns on your contributions and investment growth - helps savings grow exponentially over time. The longer money is invested, the more time compound interest has to accelerate returns. Secondly, people tend to convert employer-based 401(k)s into IRAs whenever they leave a job.
The longer someone has been in the workforce, the more chance they’ve rolled 401(k)s into IRAs, Jason Caudill, owner of annuity marketplace My Annuity Store, told The Independent in an email. Measuring medians The median IRA balance in the U.S. is $41,084. Without extremely high balances skewing figures upward, data shows that younger savers have surprisingly low IRA balances - $7,893 for those in their 20s and $15,451 in their 30s.
Those 40 and older have medians above the national median: 40s: $42,427 50s: $140,597 60s: $262,614 70s: $271,107 80s: $232,477. IRA vs 401(k) Financial experts note that consumers typically have their retirement savings in an IRA by the time they stop working. “When people change jobs or stop working, their 401(k) usually rolls into an IRA,” Caudill said.
“That makes the IRA the account most retirees actually draw their income from.” However - money from a rollover 401(k) goes directly into a savings-style account that earns very little interest. If savers don’t choose how to invest those IRA dollars, the cash remains in the low-interest account. “I regularly see people roll over a 401(k) and leave it in cash for years, earning almost nothing,” Caudill said.
“Opening the IRA is step one. Deciding what goes inside it is what actually builds your retirement.” This article is sponsored by Credit Karma. We may earn a commission if you engage with their services using links in this article.
Source: The Independent
