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Is the Average American Earnings Enough?

If you take the average of everything the average American earns, owes, saves and pays in taxes, do they earn enough?  Below are some categories that may help you get a clear picture of the average American’s financial life.


American Average Household Income and Median Household Income


  • $79,457 average household income
  • $55,331 median household income



According to the U.S. Census Bureau, the average household income was $73,298 in 2014, the latest year for which complete data is available.  The median household income in 2014 was $53,719, which means that half of American households make less than this amount, and half make more.  We took into consideration that the average American raise is 3% to determine the 2017 average household income and average median income.


American Average Household Debt


  • $132,529 average total debt
  • $198,435 average mortgage debt
  • $318,200 average mortgage size for new purchases
  • $5,509 average credit card debt
  • $49,042 average student loan debt
  • $8,000 average personal loan debt
  • $30,032 average auto loan amount on a new car
  • $1,766 average balance owed among people with overdue medical debt



Most Americans carry some type of debt, including mortgages, credit cards, student loans, personal loans, auto loans, medical and other types of debt. The total average household debt was $132,529 which is pretty staggering when you look at the average household income.


American Average FICO Score


  • 700 average FICO score



According to the FICO Score High Achievers Study, the average American has FICO score of 700.  FICO scores range from 300 to 850.  Your FICO score impacts your daily life by determining the interest rate a consumer will offer.  The better your FICO score, the lower your interest when securing credit which determines what you will pay in interest on your mortgage,  credit cards, car loans , etc. Your FICO score can even determine whether or not you will even qualify to secure a loan or line of credit.   Average credit scores bottomed out at 686, during the housing crisis when there was a sharp increase in foreclosures.  They have steadily been on the rise  and are at an all-time high.


American Average Retirement Savings


  • $97,700 average 401(k) balance
  • $100,200 average IRA balance



Although these numbers seem to be decent, two-thirds of Americans have not invested in a 401(k) and only 14% of employers offer a 401(k) plan that you contribute to on a regular basis.

To make matters worse, only 18% of Americans actively contribute to an IRA.  In fact, 25% of Americans who don’t have an IRA said they simply don’t know enough about these accounts, while 46% said they don’t have the money to save.


American Average Social Security Retirement Benefit


  • $1,363 average retired worker’s benefit per month
  • $2,687 maximum monthly Social Security benefit for those retiring at their full retirement age in 2017 ($32,000 annually)



As of January 2017, the $1,368 per monthly benefit translates to $16,416 per year.  Although

21% of married couples and 43% of single retirees rely on Social Security for substantially all of their income, Social Security is only designed to replace about 40% of the average worker’s pre-retirement income.


American Average Personal Savings


  • $4,436 average personal savings account
  • 0.06% annual percentage yield, but many of the largest financial institutions in the U.S. pay low rates, around just 0.01% APY



If your savings account interest rate is only 0.01%, you may want to consider switching financial institutions.  In fact, many Americans are looking at online banks.  The average online bank is offering 1.15% interest for your savings account.


American Average Tax Refund


  • $2,763 in 2017 (however 11.6 million Americans filed an extension so the average is subject to change)


So far, over 128.8 million returns the IRS has processed as of April 21, in which three-fourths have resulted in a refund.   The government has  distributed $268.3 billion to 97.1 million taxpayers. This is $52 more than the average refund at the same time last year and 11.6 million Americans are on extension so we will not get firm numbers until after the October 15 deadline for filers that are on extension.


American Average Tax Rates



  • 31.85% average overall income-based effective tax rate
  • $9,655 average federal tax paid
  • 14.3% average federal tax rate
  • 6.2% average Social Security (However, your employer also pays 6.2% which makes the actual Social Security total 12.4%!)
  • 9.9% average state and local income taxes (Californian high income earners pay 13.3%)
  • 1.45% to Medicare (However, your employer also pays 1.45% which makes the actual Medicare total 2.9%!)


American Average Charitable Contributions



  • $5,491 average donated to charities



This only includes the 30% of people who itemized deductions and you must keep in mind that charitable contributions vary widely based on income. The lower income range contributes significantly less than the higher income ranges.


When looking at the American averages, Americans are not making enough to keep up with their spending and to prepare for retirement.  They need to start reducing their debt and live within their means more than ever.  If Americans don’t start to bridge the gap, they will struggle in retirement.

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