Investing

What is the Average Investment by Age?

June 1, 2022
Family cooking together

Investing is a simple thing with lofty rewards. Rather than work hard for every single cent you earn, investment provides you with a vehicle to turn your money into more of itself.

As you know, inflation causes the value of money to gradually fall. That is unfortunately inevitable in most economies. Because the value of money falls, it's no good to simply leave it lying around gathering dust. By investing it, one can turn the money they do not need right now into greater yields.

There are numerous places for investment. Stocks and Cryptocurrencies are very popular lately. In both cases, people invest in them and help their value rise. Over time, they will see some yields that will hopefully lead to a profit. Ultimately, the goal is typically to have as much as possible stocked for a comfortable retirement.

The amount of money one has invested will depend on their age. Of course, it will also vary depending on where they are located, and what kind of field they are working in. Hence, any definitions of the average investment by age are rough at best.

At Age 30

30 is the age when most working professionals are settled into their careers at intermediate-level positions. By this time, they should have at least 1x their income saved, and half of that invested in safe places.

In the US, the median annual salary at age 30 is approximately US $40,560. That translates to an investment of $20,280 total. At an average 5% annual yield, that returns approximately $1,014.

At Age 40

By age 40, working professionals are firmly in intermediate or senior positions. They may have families as well. At this stage, savings should equal about 2x the annual income with half of that invested. 

The median salary for 40-year-olds is approximately $53,210. Their savings are approximately $106,420. The average investment at this stage is about $53,210, returning around $2,660 in yield annually.

At Age 50

By the age of 50, professionals need to seriously consider the idea of retirement. A premature retirement due to health or personal reasons is very much possible.

Depending on how diligently they saved and whether there were any major expenditures, a 50-year-old can have 3x to 5x their income saved up and about half of that invested. The median salary at this stage is around $56,001 per year which creates a saving goal of around $224,004 with $112,002 invested returning around $5,600 in yield annually. 

At Age 60

At 60 years of age, it is nearly time for retirement. The average investment at this age varies wildly from person to person, depending on their plans after retirement and lifestyle so far. A general rule of thumb is to have up to 6x to 10x your salary saved.

Based on the median salary in the US for age 60, the average amount saved should be $414,888 with at least $207,444 invested, resulting in a $10,372 annual yield.

For those looking at expensive retirement plans such as travels and pricey hobbies, there should be $1 million in savings and a large portion of it invested. With some careful planning, it is possible to yield upwards of $20,000 or $30,000 simply from the returns on the investment.

Closing Words

The average investments by age mentioned here are not absolutes. They are simply the ideal amounts. The exact savings will vary a lot depending on location and profession.

What is important is saving up a small amount of every paycheck and putting it into investments. Over time, they can yield a significant amount of money.

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