This Is the Average 60-Something’s Cash Savings Balance

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Have you saved as much as your peers?

Important points

  • It’s important to have a decent amount of cash in hand during your 60’s.
  • Having cash savings on hand for retirement can protect you from losses in your investment portfolio.
  • On average, those in their 60s hid $ 72,834 in their savings accounts.

By the time you reach your 60s, retirement can be around the corner. Many people choose to leave the workforce during their 60s, and this is actually when you are entitled to your full monthly benefit from Social Security.

But it is important to approach retirement with a decent level of cash savings. The reason? Once you retire, you will likely rely on your IRA or 401 (k) to pay some of your expenses. But the bulk of your IRA or 401 (k) can be invested in stocks, bonds and other assets whose value can vary based on market conditions.

What you do not want to do at retirement is to liquidate investments at a time when their value has fallen. To do so means to include losses and put yourself at risk of depleting your nest egg prematurely.

Therefore, it is a good idea to have a decent amount of cash during your 60s. And if you’re curious about how you are doing compared to your peers, recent personal capital data may give you an answer.

What saved the typical 60-something?

The average cash savings balance among people in their 60s is $ 72,834. It might seem like a lot of money to have in cash. And earlier in life, it could be.

But as a general rule, when you’ve already retired or are about to retire, it’s good to have enough money in cash to cover one to two years’ cost of living. That way, you can potentially drive away a market downturn without selling investments at a bad time.

So let’s say you have about $ 72,000 in your savings account, and you spend $ 4,000 a month on living expenses (and expect to keep doing so in retirement). In that case, you have 18 months of spending in cash, which means you are pretty good.

Of course, you can also have some of your IRA or 401 (k) in cash, and that money can also count towards your emergency cash reserves for retirement. So, let’s say you spend $ 4,000 a month but only have $ 48,000 in cash savings. These are a year’s bills, which is at the bottom of what you normally need. But you could also have another $ 50,000 in cash in your IRA or 401 (k), in which case you should be fine.

Do you have to put savings in savings during your 60s?

If your savings can use a little boost, then it pays to replenish your cash reserves. But do not forget that IRAs and 401 (k)’s offer tax benefits, unlike a savings account. Traditional IRAs and 401 (k)’s actually give you a tax deduction on the money you contribute to your account, and these are a fringe benefit you do not want to pass up. So if you are still working at this point during your 60s, go ahead and try to maximize your IRA or 401 (k), or get as close as possible.

Remember, you can put money in an IRA or 401 (k) that you put in cash. And if you’re in your 60s, you’re old enough to withdraw from one of these accounts without penalty. This means you do not have to stress that that cash is not available to you in a savings account.

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