American Retirement Savings: A Stark Comparison of Strategies

The average American saves only 3.9%, while financial mutants like Manny save 25%, leading to vastly different retirement outcomes.

### The Importance of Savings: A Comparison of Average Americans and Financial Mutants
* 💔 A shocking statistic reveals that **51% of Americans over 65 have less than $100,000 saved for retirement**, with a median retirement savings of only **$7,650**.
* 📉 The average American saves about **3.9% of their income**, which translates to roughly **$232 per month**, while many consume **99% of what they earn**.
* 💡 Financial experts recommend saving and investing **25% of gross income**, a goal that may seem **daunting**, especially for those in their 20s.
* 🕒 By the time individuals reach their 30s and beyond, not striving to save this **percentage** can lead to missed opportunities for **financial security**.
* 📊 A case study comparing Average Allen and Manny the Mutant illustrates the impact of savings rates: after 35 years, Allen accumulates **$477,000**, significantly better than many but still **far behind**.
* 💰 In contrast, Manny, who saves **25% of his income**, ends up with nearly **$3.5 million for retirement**, showcasing the vast difference in outcomes based on savings behavior.
* 🔍 To understand your savings position better, resources are available at money.com/resources to help assess if you're **ahead or behind the curve**.
* 🚀 The stark contrast between these two savings strategies emphasizes the **importance of proactive financial planning** for a **secure retirement**.

[Music] The last metric we want to look at with the average American relative to a financial mutant relative to Manny is the savings rate. Oh, this one breaks my heart, guys. When I was doing prep for the Millionaire Mission, the book, here's a stat that just kind of haunts me a little bit. Is that if you look at 51% of Americans over the age of 65, they have less than $100,000 saved for retirement. That's terrifying. The actual, it goes even deeper. The median retirement savings for Americans over the age of 65 is $7,650. So, and being a financial mutant, I thought about this even a little more differently. I was like, you know, most people work for 40-plus years. If you had to think about what your behavior had to look like to actually save up to this $100,000 over a 40-year working career, we quickly found out that people are, we're going to give you a stat that's higher than this.

but people are saving right around 1% of their income. They're consuming 99% of what they make and then they're potentially saving and investing 1%. Because even the people we're going to show you that the average savings rate is somewhere around 3.9%. But what this doesn't tell you, that's what the average savings rate is. Some of these savings rates then get consumed. That's your 401k and things. But then we know how leaky a lot of Americans treat their 401ks. So guys, we wanted to kind of just walk you through when we tell you we want you saving and investing 25% of your gross income. We know that's a big ask. We get it. And in your 20s, that's completely aspirational because you're probably broke. But we want you to feel the pressure of you've got to get your army of dollar bills working so you can own your time that much sooner. But by the time you're in your 30s and above, once

you've gone from a job to now a career. If you're not trying to really hit this, you're really missing out. And we'll go a step further, but we have a great resource. If you go to money.com/resources, what will 25% do for you? I encourage you to go check that out so you can actually see, are you ahead of the curve, behind the curve? What does this mean for you, for your savings rate, so you can take this that much more serious? And if you don't believe that this is a big deal, let's revisit our case study. Remember, we just said that the average American saves about 3.9% of their income. So again, let's assume that average Allen and Manny the mutant both make the median household income in this country, just under $72,000 a year. Average Allen is going to have a savings rate of 3.9%. That's what the average American is saving right now. That comes out to about $232 per month. But Manny gets it, and he

understands it. He says, You know what? I'm going to save 25% of my gross income, and we're not going to worry about increasing this for inflation. We're just going to assume static numbers. So, Manny is going to save $1,490 per month. Average Allen saves 3.9%. Man of the mutant saves 25%. Well, if they do that for an entire career, for an entire working lifetime, for 35 years. While Allen was still able to build up resources, he was still able to build up $477,000 in a retirement portfolio, which is better than $100,000, which a lot of folks don't have now, close to five times better than the typical American, by the way. But when you compare that to Manny, who saved and invested 25% for an entire work year, Manny has almost three and a half million dollars invested that he can now live off of. These two people are nowhere even close to the same stratosphere.

Most Americans Are Failing at Saving—Are You? (Discover How Much You Really Need!)

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The Money Guy Show

Over 51% of Americans over 65 have less than $100,000 saved for retirement, with a median savings of just $7,650.

Many people are saving only around 1% of their income, consuming 99%, which contributes to the low retirement savings.

9%, but this often doesn't reflect the true picture due to leaks from 401k plans and other factors.

Aiming for a higher savings rate is crucial for financial success, with 25% being a significant target.

9% of their income, which is about $232 per month on a median household income of $72,000.

Taking savings seriously can make a substantial difference in one's financial future.

The Impact of Saving Strategies on Retirement Wealth

Manny saves 25% of his gross income, while the average person saves only 3.

After 35 years, Allen accumulates $477,000 for retirement, which is significantly better than the typical American's savings.

In contrast, Manny's aggressive saving and investing strategy results in almost $3.

5 million for retirement, highlighting the dramatic difference in outcomes between the two approaches.