According to the 2016 Retirement Confidence Survey published by the Employee Benefit Research Institute, about 29% of workers expect their IRAs to be a major source of income in retirement. So, how much have Americans been parking in their IRAs? Not as much as you might think. You may be above-average when it comes to saving for future financial security. And if you're not, you can get above average.

Image source: Getty Images.

So, just how much does the average American have in his or her IRA account(s)? We can get a good idea from Fidelity Investments, which administers accounts worth more than $5 trillion for millions of Americans. In its third-quarter report for 2016, it reported that the average IRA account balance rose 6% over year-ago levels, to $94,100 -- and surged 42% over the past five years.

That doesn't necessarily reflect astute investing, because a significant portion of the increase is likely from account holders adding funds over the course of the year. For both traditional and Roth IRAs in 2016 and 2017, contribution limits are $5,500 for most people and $6,500 for those 50 and older.

Image source: Getty Images.

What kind of performance can your IRA deliver?

It can be hard to tell if a $94,100 account balance is a good thing or not. It largely depends on your age and how much longer you have to grow the account. Check out the following table. It shows you how big your account can grow if you have $94,100 now and add $5,500 each year for various numbers of years, with the account growing by an annual average of 8%. I'll address the third column soon.

Years Until Retirement

$94,100 Plus $5,500 Per Year Grows at 8% Annually To

4% Withdrawal

5 years



10 years



15 years



20 years



25 years

$1.1 million


30 years

$1.6 million


Calculations by author.

You can see that a balance of $94,100 is a great start if you're still 20 or 30 years away from retiring, but a less satisfying sum if retirement is coming up soon. The 4% withdrawal column shows you how much you'd get if you withdraw 4% from the fund in your first year of retirement. That's an old rule of thumb designed to have your nest egg last for about 30 years, if it's divided between stocks and bonds and the withdrawal is adjusted for inflation each year. It's an imperfect rule and not applicable to everyone in every year, but it's still helpful as a rough guide.

Clearly, if you're retiring in five years, your IRA account will only offer close to $7,000 annually -- though, notably, in a Roth IRA that income will be tax-free. If you're 25 years away from retiring, you might hope to get more than $40,000 from your IRA each year. The table also shows the value of postponing retirement, if you can and need to. The difference in the size of the account and the 4% withdrawals is quite sizable from each year to five years later.

Image source: Getty Images.

What to do -- to boost your future income

IRAs can obviously be big helps when saving for retirement. (And 401(k) accounts, which also come in traditional and Roth forms, can be great helps, too -- and they sport much bigger contribution limits.) The information above should make clear that even annual investments of $5,500 can add up to hefty sums. If you're not where you want to be with your retirement savings, there's probably still time to significantly improve your financial future.

Save aggressively and invest effectively. Aim to max out your IRA contribution each year and perhaps your 401(k) contribution, too. Consider inexpensive, broad-market index funds for your long-term dollars, as they have tended to outperform managed stock mutual funds over long periods. Another smart move, if you can swing it, is to delay retiring by a few years. That will give you a chance to sock more away and will give your savings more time to grow. It can also help you delay starting to collect Social Security, in order to end up with bigger checks.

Whether your current IRA balance is above or below average, there are steps you can take to have a better retirement. Learn more about opening an IRA (or switching providers, as some offer better terms and lower fees than others) in our IRA Center.