Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

What Is The Average Retirement Account Value In 2019?  How Much Was Needed To Be Saved To Get There In Time For Retirement?

Summary

Average Retirement Account Value for age 55 - 64 for those who have saved is $374,000.

About $7,000 invested early in the career could have achieved a large enough account value at age 65 to sustain retirement lifestyle.

What Is The Average Retirement Savings in 2019?

How much does the average American have saved for retirement? Nothing. Nothing at all.

https://www.thestreet.com/retirement/average-retirement-savings-14881067 

What Is The Average Retirement Account Value?

Age 55 - 64:

Average retirement account: $374,000

Median retirement account: $120,000

As a comparison, my girlfriend turns age 60 soon. Her retirement savings are $344,704 based on $34,000 salary and raising two kids on her own up until the last two years when she got a new job position.  So she is at 10 times her old salary saved or can sustain that $34,000 life style in retirement.

So how much needed to be saved to get to a $374,000 retirement account?

Portfolio Visualizer goes back to 1986 so I started there for the analysis.  I randomly picked 10 popular companies from 1986 and spread across the sectors.  $600 was invested in each stock for a total of $6,000 and dividends were reinvested.  This goes with my theme that a young person can invest $1,000 to $2,500 into a stock and then just move on to the next one.  All they can lose is that initial investment.

PORTFOLIO VISUALIZER RESULTS

Portfolio Performance
Start Balance 1/1/1986 $6,000
End Balance 5/31/2019 $435,877
CAGR 13.68%

After investing only $6,000, the portfolio ending balance was $435,877 after 34 years beating the average saving of $374,000. 

POSITION RETURN CONTRIBUTIONS

Ticker Name Category Weight Return Contribution
ABT Abbott Laboratories Health Care / Major Pharmaceuticals 10.00% $50,290
PG Procter & Gamble Company Basic Industries / Package Goods/Cosmetics 10.00% $32,848
MO Altria Group Consumer Non-Durables / Farming/Seeds/Milling 10.00% $165,236
BA Boeing Company Capital Goods / Aerospace 10.00% $34,994
JPM J P Morgan Chase & Co Finance / Major Banks 10.00% $14,071
XOM Exxon Mobil Corporation Energy / Integrated oil Companies 10.00% $18,144
TXN Texas Instruments Incorporated Technology / Semiconductors 10.00% $45,942
KO Coca-Cola Company Consumer Non-Durables / Beverages 10.00% $34,995
T AT&T Inc. Public Utilities / Telecommunications Equipment 10.00% $5,427
WEC WEC Energy Group, Inc. Public Utilities / Power Generation 10.00% $27,930

Back in 1985 my income was $30,191 and $6,000 was 19.9% of my gross income.  If $55,000 is average household income today, then 19.9% of that would be $10,945.  It would probably take the household four years to save $11,000 covering about 38 years time span.  I worked a total of about 43 years age 18 to 60.

Financial advisors say at age 65 retirement that the retirement account value should be 11 times desired income or in the case of the $55,000 household about $484,000 for 80% income replacement.  This could have been achieved with about an $7,000 investment early in the person's career.

As a side note just investing $800 in $AAPL would have resulted in $445,938 for the same time frame.  This is after they released the  Macintosh computer.  The Macintosh is a family of personal computers designed, manufactured, and sold by Apple Inc. since January 1984. The original Macintosh was the first mass-market personal computer that featured a graphical user interface, built-in screen and mouse.  

Disclosure: I am/we are long ABT, MO, BA, JPM, TXN and WEC.