If you’re imagining the “average” American worker has a modest but respectable retirement cushion tucked away somewhere, you’re sorely mistaken. According to a new report from the National Institute on Retirement Security, the median amount saved for retirement among U.S. workers is just $955. Not missing a zero. Not a typo. That figure includes workers with 401(k)s and similar plans, as well as the roughly 56 million Americans who don’t have access to any employer-sponsored retirement account.
In other words, half of working adults between the ages of 21 and 64 have less than a grand saved for the future. The other half has more, but not nearly as much as you’d expect.
Even the ‘Savers’ Are Behind
Among workers who do have retirement savings, the median balance comes in at about $40,000. That may sound reassuring until you compare it to what Americans say they actually need to retire comfortably, which is roughly $1.5 million. The gap between expectations and reality is wide enough to drive a golf cart through, and it helps explain why retirement increasingly looks less like a finish line and more like a suggestion.
The report also found that many older workers aren’t much closer to their savings targets than younger ones. Workers ages 55 to 64 had accumulated only 19% of what they should have saved by that point, based on common benchmarks. By age 60, Fidelity’s rule of thumb says people should have about eight times their annual income saved.
Why So Many Are Falling Short
One major factor is access, or lack of it. Millions of Americans don’t have a retirement plan through work, and the data shows that when saving isn’t automatic, it often doesn’t happen at all.
“The bottom line is that if Americans are not saving for retirement through their employer, then they are probably not saving at all,” the report concluded. That reality is starting to show up elsewhere. Census data indicates that 15% of seniors were living in poverty in 2024, the highest rate of any age group and an increase from the year before. As savings fall short and costs remain stubbornly high, more older Americans are heading back to work. A recent AARP survey found that 7% of retirees returned to the workforce in the past six months, with nearly half citing financial pressure as the reason. The trend of “unretiring” is becoming less of an exception and more of a backup plan.
Social Security Is Carrying More Weight Than Ever
With personal savings so thin, Social Security is doing a lot of heavy lifting — and many people misunderstand just how much. While some workers assume it will fully cover their retirement, Social Security typically replaces only about half of a retiree’s annual income. At the same time, the program faces a funding shortfall that could result in an across-the-board 20% benefit cut starting in 2034 if lawmakers don’t act.
For millions of seniors who already rely on Social Security for most of their income, that reduction wouldn’t be theoretical. It would be immediate and painful.
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