According to the Federal Reserve’s<\/a> Survey of Consumer Finances, 51% of households in their mid-60s to early 70s had money in retirement-specific accounts in 2022, the most recent year available. That’s the highest percentage for this age range since 2007, but lower than what most younger age groups reported, with the exception of those under 35.<\/p>\n The lower participation rate among older households is likely due to several factors, according to Mindy Yu, senior director of investing at Betterment. It \u201cmay reflect a natural drawdown of assets in retirement, as well as the possibility that older generations were more likely to rely on pension plans, which are not included in this dataset.\u201d<\/p>\n By contrast, younger households have benefited from greater access to retirement savings plans and more education around investing early, she said.<\/p>\n Americans ages 65\u201374 are often at a turning point financially, with income declining as retirement begins and savings being withdrawn. Flexibility and realistic expectations are important at this stage as you plan spending for a retirement with an uncertain time horizon.<\/p>\n For those in their mid-60s to early 70s who reported having retirement accounts<\/a> in 2022, the median balance was $200,000. That figure is well above the balances reported by other age groups. (Medians<\/a> are used here instead of averages to reduce the influence of exceptionally high or low balances.)<\/p>\n \u201cFor households still holding retirement accounts (at this age), median wealth rose meaningfully through 2022,\u201d said Eric Ludwig<\/a>, director of the Center for Retirement Income at The American College of Financial Services. However, inequality widened: \u201cSome retirees are very well positioned; others are drawing down with little margin for error,\u201d he said.<\/p>\n But at this stage, drawing comparisons among peers is less valuable than understanding whether your income sources and withdrawals can support your spending throughout retirement. \u201cSuccess is less about how much is saved and more about how well assets are coordinated with spending, taxes, and withdrawal rules,\u201d Ludwig said.<\/p>\n Shifting from saving for retirement to spending in retirement can be a challenge. \u201cYou\u2019ve trained yourself for 30 or 40 years to save, to defer, to accumulate,\u201d Ludwig said. \u201cThen one day someone tells you to reverse course and spend.\u201d<\/p>\n For many people in their late 60s and early 70s, spending decisions are shaped not just by savings levels but by uncertainty around rising healthcare costs, longevity, and how expenses may change over time. Social Security can be one source of predictable income, but it\u2019s not meant to cover all of your expenses. Yu said savings in a 401(k)<\/a> or IRA<\/a> can provide additional flexibility to help navigate unexpected costs or market shifts.<\/p>\n But how much can you spend when you don\u2019t know how many years your savings need to last? Broad retirement models suggest people can often spend more than they expect, Ludwig said, but no calculator can say what \u201cenough\u201d is.<\/p>\n He offered this recommendation: Give yourself permission to spend on things that create memories in the earlier years of retirement, when you might want to do something adventurous like \u201chike Patagonia or bicycle through Vietnam.\u201d<\/p>\n \u201cThe 85-year-old version of you won\u2019t regret the trip you took at 65,\u201d he said. \u201cThey\u2019ll only regret the trip you didn\u2019t take because you were afraid of a spreadsheet.\u201d<\/p>\n For many households in this age range, short-term decisions\u2014how much to spend, when to adjust, and how to balance security with meaningful experiences\u2014will be what matters most for their financial health in retirement.<\/p>\n <\/p>\n
<\/p>\n