The average IRA balance is just under $100,000, but that figure only provides a limited picture of how you stack up against the average. There's nothing wrong with a bit of IRA voyeurism, especially if it motivates you to consider your retirement savings strategies more carefully. However, it's also critical to understand what retirement savings averages tell you and whether or not they're a reliable indicator of how you compare. Here are some actual IRA-related numbers and some thoughts on how you should interpret them.
$97,515
According to the Employee Benefit Research Institute, that is the typical IRA balance as of 2016. (EBI). It determines that amount by dividing the total amount saved ($2.36 trillion) by the approximate 24 million accounts monitored in its IRA database. However, that doesn't accurately reflect how much the average IRA owner has in their account.$123,973
More telling is this sum, which represents the typical IRA balance per person. There is a difference in this case because it is typical for individuals to have multiple IRAs, whether as a result of 401(k) rollovers, contributions to both traditional and Roth accounts, or the creation of various accounts at various points in their lives.$283,200
And this is what happens once you have been saving for a while. Naturally, your balance will increase the longer your money has to grow. The average IRA balance for an account that has been held for less than 10 years is $82,100, according to data from the 2016 Investment Company Institute's IRA Owners Survey. This amount is typically present in IRA accounts owned by households at least 20 years old. The average balance in IRAs held by individuals for 10 to 19 years is $158,300. A quarter of savers prefer the Roth when adding new funds to an existing IRA. This is the proportion of new contributions made to Roth IRAs in the EBRI database in 2016. Only 6% of traditional IRAs, in contrast, saw new contributions. The Roth is preferred by active savers, which is not surprising. The Roth offers significantly more flexibility than its conventional counterpart. One benefit of a Roth account is the freedom to withdraw contributions (but not earnings) whenever you want for any reason. Your contributions to a traditional IRA are restricted until you reach age 5912. If you attempt to withdraw money before that time, you will be subject to an early withdrawal penalty and nonqualified distribution taxes.Understanding the numbers
The amount someone else has saved isn't that instructive unless that person plans to fund a retirement identical to yours, so keep that in mind as you review your IRA balances with fresh eyes. (For what it's worth, the typical household headed by a person over 65 spends about $46,000 annually or $3,800 per month.) Your total savings, including your IRAs, 401(k), pension, and any spare change you intend to put toward retirement, will be included in a more accurate assessment of your readiness for retirement. Use a retirement calculator to determine how much money you'll have when leaving the 9-to-5 grind, thanks to your savings.