Maurie Backman

Sat, Jun 28, 2025, 5:07 AM5 min read

A significant portion of older Americans are headed for retirement with insufficient savings.

The Federal Reserve reports a median retirement savings of $185,000 for Americans aged 55 to 64 as of 2022.

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Among Americans ages 65 to 74, the number increases to $200,000. But neither balance is a particularly large amount, given that retirement could easily last 20 years or longer.

Baby boomers as a whole might not seem prepared for retirement, but that doesn’t mean all older Americans are doomed. Some baby boomers are headed for financial security, and it’s all thanks to the smart decisions they make on a regular basis.

Here are three things financially savvy baby boomers do with their money that could lead to decades of comfort once they retire.

Earlier this year, U.S. News & World Report found that 42% of Americans across all ages don't have an emergency fund.

But financially savvy boomers don’t let themselves get into a situation where they can’t cover a surprise bill and end up with debt. Rather, they practice paying themselves first.

On a basic level, paying yourself first means allocating money to your savings from every paycheck before using it for anything else — but there are different ways to do it.

If your employer offers a 401(k) and you sign up, contributions can be taken directly from your paycheck. If not, you can set up automatic transfers to an IRA so that you’re funding your retirement plan every month.

You can also set up automatic transfers from a checking account, where your paycheck might land, to a savings account to build an emergency fund. Having emergency cash reserves could spare you from having to take out a loan or put an unplanned expense on a credit card.

Experian says that baby boomers have an average of $6,754 in credit card debt. But having savings ready at all times could help you avoid debt and the financial insecurity it can lead to.

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As people’s paychecks increase, a funny thing starts to happen. Instead of taking the opportunity to save more money, many folks opt to spend more instead. But that could lead to more stress, more debt and less stability.