Comparing yourself to an average is the wrong benchmark — here's what the real numbers show, and what a realistic target actually looks like.
Diane called Kevin Lum's office not long after turning 60, wanting one specific thing: to know how she compared to everyone else her age. Kevin hears a version of that question constantly, and it sends him back to the same point every time: what other people have saved and what someone actually needs to have saved are two very different questions. Most people are comparing themselves against the wrong one.
In his video "Average Retirement Savings by Age 60," Kevin pulls from Vanguard's participant data and the Federal Reserve's Survey of Consumer Finances to show what a typical 60-year-old has actually saved, then rebuilds the standard "8x your salary" rule into something more realistic.
1. Average vs. Median: Why the Distinction Matters
It helps to know which number is being cited: the average is the sum of everyone's savings divided by the number of people; the median is the midpoint, where half have more and half have less. Picture five savers with balances of $10,000, $100,000, $250,000, $500,000, and $2 million: the average comes out to roughly $572,000, even though only one person has more than $500,000. That single large account pulls the average far above what's typical — the median, $250,000, is the more accurate picture, and national retirement savings data works the same way.
Ask yourself: When I compare myself to a "typical" savings figure, am I comparing against an average or a median — and does that number even apply to my situation?
2. What Americans Actually Have Saved by 60
Vanguard's participant data puts the median 401(k) balance for someone in their late 50s to early 60s around $71,000, with an average closer to $207,000. But 401(k)s only capture one slice of the picture — most people also hold an IRA, Roth IRA, or other outside accounts, which is why Kevin leans on the Federal Reserve's Survey of Consumer Finances for a fuller view: average total retirement savings of $537,000 for this age group, median $185,000, the same average-vs-median gap from Section 1 playing out in real data. It's worth noting only 41% of people over 60 feel their retirement savings is on track — the uncertainty Diane brought to her call is closer to the norm than the exception.
Ask yourself: Based on the median rather than the average, where do I actually fall relative to my peers — and does that comparison tell me anything useful about my own plan?
3. Why the "8x Salary" Rule Overestimates What Most People Need
The rule of thumb most people have heard is simple: have 8 times your income saved by 60. Earn $100,000, and the target is $800,000. Kevin thinks it overstates what most people actually need, because it assumes a fairly conservative rate of return, expenses that stay flat into retirement, and a static withdrawal rate. In reality, a well-structured portfolio has historically done better; costs like a mortgage and commuting often shrink or disappear; and retirement spending tends to follow a curve — higher early on, lower in the middle years, and sometimes higher again later if long-term care becomes a factor. Once expenses are estimated at roughly 75% of pre-retirement spending, Social Security is backed out, and a more realistic withdrawal rate is applied, the target for most people comes out meaningfully lower than the standard multiple suggests.
Ask yourself: Am I working toward a savings target built around my actual expected expenses, or one built on the assumption that nothing about my spending will change in retirement?
4. A More Realistic Target, By Income Level
Working through those adjustments, Kevin's more realistic target lands closer to 5 times income by 60 for many people, rather than 8 — with the caveat that 8x still provides more margin for error, and that someone retiring single, without a spousal Social Security benefit to lean on, may need to save closer to that higher end.
These are starting points, not prescriptions. Kevin is direct about this in his video: no one should change a retirement plan based on a general rule of thumb from a video online. It's a reason to run the numbers, not a reason to skip that step.
Ask yourself: Have I actually adjusted a standard savings multiple for my own expected spending and Social Security income, or am I still using a number built for someone else's situation?
5. Closing the Gap If You're Behind
For anyone who comes up short, Kevin's message is direct: there's still time, and he's seen people in far more difficult positions turn things around before retiring. A few levers tend to make the biggest difference: cutting expenses to free up money for aggressive saving; working a year or two longer; delaying Social Security to increase guaranteed income later; and, for savers parked defensively in CDs out of fear, shifting toward a more growth-oriented portfolio, since cash alone typically won't generate the return needed over a 30-to-40-year retirement. Some also add part-time income in early retirement to reduce how much needs to come from savings.
Ask yourself: If my number today is behind target, which lever — spending, working longer, delaying Social Security, or portfolio allocation — am I most able to pull in the next 12 months?
Your Retirement Savings Reality Check
Use this as a quick self-assessment. Answer honestly — this is for you, not a test.
Watch the Full Breakdown
Kevin walks through both studies and the full recalculation in his video "Average Retirement Savings by Age 60," with the math behind each income example above.
.png)
