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Turning 60 is a milestone birthday that also may prompt a financial reality check. But if you're comparing your bank balance to your retirement accounts, you're reality-checking the wrong number. While a 401(k) or IRA is designed for long-term investing, the cash sitting in your accounts tells a different story. Your checking, savings, or money market accounts are designed to help cover unexpected expenses, fund your day-to-day spending, and provide flexibility as you approach retirement.
The Federal Reserve's most recent Survey of Consumer Finances data reveals a benchmark, showing how much cash Americans in their late 50s and early 60s actually keep much of their cash in liquid accounts. The data also reveal that the gap between the average and median balances underscores how differently households are prepared. Here's how those numbers stack up and how you may be able to use them to prepare yourself financially.
How much does the average 60-year-old have in the bank?
The Survey of Consumer Finances groups households into age ranges rather than individual ages, making the 55-64 bracket the closest available benchmark. The data from the Federal Reserve shows that households ages 55 to 64 hold an average of $72,520 in transaction accounts (bank accounts). But the median balance is just $8,000, showing that half of households have less than the average available in liquid cash.
Why the average and the median tell different stories
The average balances make it seem like most Americans are sitting on large amounts of cash. But the median paints a more realistic picture. A small share of households with an exceptionally large amount of cash will inflate the average. But the data reveals that for most people nearing retirement, liquid savings are far more modest than the average figures reflect.
Bank savings aren't the same as retirement savings
Remember that these numbers only reflect money held in transaction accounts like checking, savings, and money market accounts. Retirement accounts like 401(k)s and IRAs, brokerage investments, and pensions are excluded. Assets like home equity are also not considered liquid assets. This is an important distinction because your emergency fund and everyday spending money don't serve the same purpose as your retirement nest egg.
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How cash balances change after retirement
Per the Fed's SCF data, there's a change after retirement. Average cash balances jump to $100,250, while the median goes up to $13,400, for those households in the 65-74 age bracket. This jump shows just how liquid savings change once people enter their golden years.
Many retirees keep more cash to cover everyday expenses without having to sell investments during market downturns. But others may gradually spend their savings after leaving the workforce, depending on their income sources and expenses.
Why financial planners want retirees to keep more cash on hand
Cash in the bank becomes more than just an emergency fund as you near retirement. Having enough liquid savings can help retirees avoid selling stocks, giving investments time to recover. This strategy, often referred to as a market-downturn buffer, can reduce the risk that poor investment returns early in retirement may permanently weaken your portfolio.
How much cash should a 60-year-old have?
Many financial planners recommend keeping one to two years of living expenses in cash as retirement begins. This is to help cover expenses during unfavorable moments in the market.
Average households are spending about $78,500 per year, according to the latest data from the BLS. This translates to having roughly $78,500 to $157,000 in liquid savings. Reaching that goal can be difficult, however, as the U.S. personal savings rate stood at just 2.6% in April of 2026, based on data from the U.S. BEA. This indicates that many households are saving relatively little, though the right amount depends on your spending needs, pension income, and risk tolerance.
Why many Americans are falling short
In a time of rising costs, building a large bank balance has become increasingly difficult. Higher housing, food, health care, and insurance eat up more household budgets. The personal savings rate also remains low, which suggests many Americans have little room to set aside additional money, even with retirement on the near horizon.
How to build your cash cushion before retirement
If your cash savings fall short of your target, it isn't too late to make changes. Consider automating transfers and directing tax refunds and bonuses to high-yield savings accounts. Additionally, reducing discretionary spending can strengthen your emergency fund before retirement starts.
Bottom line
The Federal Reserve's data shows that the typical 60-year-old household has far less cash in liquid accounts compared to the average figure. This shows the importance of looking beyond headline statistics. While retirement accounts are built for long-term growth, liquid savings provide you with the ability to handle emergencies, cover everyday expenses, and avoid selling off investments.
If your cash balance is below these benchmarks, don't assume you're behind forever. Retirement planning is about matching your savings to your spending needs, not someone else's bank account. Even increasing your cash reserve by a few months can help strengthen both your retirement plan and current financial position.
