Why Do Retirement Savings Benchmarks Vary So Much Between Different Sources?
Look up “how much should someone in their 40s have saved for retirement” and it’s easy to find three sources with three very different answers, sometimes off by a factor of two or more. It raises a fair question about which one, if any, is actually right.
The quick answer
Retirement savings benchmarks vary because they’re built from different data, different assumptions, and different definitions of what counts as “savings” in the first place. A figure based on average balances looks very different from one based on median balances, a survey that only includes people with a retirement account looks different from one that includes everyone in an age group, and a benchmark tied to one income assumption won’t translate to a household with a different income. None of the individual numbers are necessarily wrong — they’re just answering slightly different questions.
Median versus average, and why the gap matters
Average retirement balances are pulled upward by a relatively small number of very large accounts, which can make the “average” figure much higher than what a typical household actually has saved. Median figures — the midpoint value — tend to paint a more representative picture of a typical person’s savings, but median and average are often reported side by side without much explanation of which one a given benchmark is using, which alone can account for a large chunk of the variation between sources.
Who actually gets counted in the sample
Some studies only survey people who already have a retirement account, which excludes anyone with $0 saved and shifts the whole benchmark upward. Others attempt to survey a full cross-section of a population, including people with no retirement savings at all, which pulls the numbers down. Neither approach is inherently better, but comparing a benchmark drawn from account holders only against one drawn from the general population is comparing two different populations, not two answers to the same question.
What counts as “retirement savings” varies too
A benchmark based only on 401(k) or IRA balances misses pensions, other investment accounts, home equity, and — for a meaningful share of future retirees — anticipated Social Security income, which factors into why the program shows up so often in political and policy discussions about long-term retirement adequacy. A narrower definition of savings will naturally produce a lower benchmark than a broader one, even when describing the same group of people, and a benchmark that assumes everyone has access to a workplace plan glosses over how differently things play out for someone whose job offers no retirement benefits at all.
Why benchmarks shouldn’t be treated as a scorecard
Even a well-constructed benchmark is describing a population average or median, not a specific household’s needs, which depend on expected expenses, other income sources, and how many working years remain. This is part of why it’s common for people to have several old 401(k) accounts scattered across past jobs that don’t get counted consistently across different surveys, and why it’s rarely too late to make meaningful progress even after seeing a benchmark that looks discouraging. A benchmark is a rough reference point drawn from other people’s data, not a rule about what any individual situation requires.
Final thoughts
The wide spread between retirement savings benchmarks is mostly a story about methodology — median versus average, who’s included in the sample, and what’s counted as savings — rather than one source being right and the others wrong. Reading the fine print on how a figure was calculated is usually more useful than comparing the headline number itself across sources.