How Does Your Retirement Savings Compare To The Average 'Upper Class' Nest Egg? Here's What The Top 20% Have Saved

Are you on track for a comfortable retirement or falling behind? The numbers might surprise you.

According to data from the Federal Reserve analyzed by The Motley Fool, the top 10% of Americans – those in the 90th to 100th net worth percentiles – have a median retirement savings of $900,000. That's a pretty solid cushion. Meanwhile, those in the 75th to 89.9th percentiles come in with a median savings of $269,000.

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But what exactly qualifies as "upper class?" While there's no set definition, being in the top 20% by income often puts you in that category. If you're earning around $145,000 or more annually, you might be part of that group depending on where you live. 

When looking at the numbers, it's easy to feel discouraged if your retirement savings aren't quite there yet, but keep in mind that these are median figures. That means half of the people in these groups have saved more and half have saved less. What matters is that you're steadily saving and investing toward your future.

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Interestingly, the wealthiest Americans aren't just saving more – they're seeing their retirement savings grow much faster. Since 1989, the top 10% has seen their retirement savings increase by 713.24%. That's the power of compound interest in action.

For the rest of the country, the median retirement savings for all households is about $87,000. The median is much lower if you're under 35, at $18,800. So if you're doing better than these numbers, you're already ahead of the game.

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One major reason the upper class continues to grow its savings is its investments. The top 10% of households own nearly 87% of stocks, which shows how critical investing is for long-term growth.

Looking to grow your retirement savings? Here are a few strategies:

Save regularly: Set aside a portion of each paycheck specifically for retirement.

Max out your 401(k): Use any employer matching program.

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Open an IRA: This provides more tax benefits and investment flexibility.

Diversify your portfolio: Spread your investments across different asset types.

Increase your savings rate: As your income grows, aim to boost your savings rate.

Remember, retirement planning is a long-term process. The earlier you start saving and investing, even with small amounts, the more time compound interest has to work in your favor.

Retirement goals also vary based on lifestyle, location and personal preferences. For instance, someone in Northwest Arkansas might need less to live comfortably than someone in Washington D.C. or California.

Ultimately, the focus should be on your financial journey and goals. With steady effort and smart financial choices, you can work toward a comfortable retirement no matter where you start.

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