This Is the Average 40-Something’s Cash Savings Balance

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How does yours stack up?


Key points

  • Personal Capital reports that their average user had about $57,000 in savings in 2021.
  • It’s a good plan to have about six months of living expenses saved for emergencies.
  • Above that amount, consider investing to potentially earn a higher return.

Many people struggle to save money earlier in their careers. You may have spent your 20s struggling with low-wage jobs and paying off various debts. And you may have then spent your 30s earning more money, but spending the bulk of it on a down payment for a home and childcare expenses.

But if you’ve reached your 40s, you may be in a more secure place financially. You’re hopefully earning more and spending less on childcare (if your kids are school-aged and don’t require full-time care). And you might own or rent a home you can comfortably afford now. And all that might mean you’ve been able to accumulate more money in your savings account.

But if your savings account balance is similar to the average for people your age, you may need to assess that number and make sure it’s not too high. So if you’re wondering how your cash savings balance compares to that of other 40-somethings, Personal Capital has an answer.

How much are 40-somethings saving?

According to 2021 data from Personal Capital, based on their users’ average account balances, the typical cash savings balance among adults in their 40s is $56,585. That doesn’t include money in checking accounts or what Personal Capital calls “other” types of cash.

Now at first glance, $56,585 seems impressive. And it’s considerably higher than the average $35,434 that those in their 30s have saved. But that $56,585 may be a little too high, believe it or not.

Here’s when investing might make sense

The money you have in savings should be earmarked for emergencies and short-term goals. But if you’re saving for longer-term goals, like retirement, you may not want to keep all that cash in the bank. Rather, you may want to invest it for potential added growth.

Say you want to maintain an emergency fund with enough cash to cover six months of essential living costs. If you spend $6,000 a month, a $36,000 savings account balance should be enough.

If your only other major goal is saving for retirement, and you have about $56,000 in your savings account, then you may actually have too much cash in there. In that case, you might consider transferring some of that money into a brokerage account and investing it for a potentially higher return over the long term.

That said, if you’re shy about emergency savings, then it makes sense to try to boost your cash reserves. But otherwise, be careful when keeping your money in an account that will only deliver a minimal return on your cash.

Does comparing yourself to other 40-somethings make sense?

Yes, at least from a curiosity standpoint. But ultimately, don’t worry about what other people your age have saved. Instead, make sure you have the right amount of cash in savings to meet your needs. And at the same time, make sure you haven’t gone overboard on the cash savings front, because you don’t want to stunt your money’s growth and struggle with long-term goals, like building a nest egg, down the line.

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