Here’s How Much Americans Save for Retirement: How Do You Compare?
Check out the average retirement nest egg by age.
Saving enough money for retirement is a key part of the American Dream. However, many people worry that they aren’t on track to achieve this financial goal.
One recent survey reported that U.S. households had an estimated median retirement savings of $64,000, but Americans think they need $1.46 million in savings to retire comfortably. So those worries aren’t entirely unfounded.
However, that doesn't mean you have to throw in the towel. There are some catch-up steps and strategies that you could start using today.
Key Takeaways
- A substantial number of Americans have no retirement savings at all.
- Average retirement savings varies among age groups, with younger workers tending to have the lowest account balances and middle-aged workers the highest.
- Retirement balances also vary widely based on income and a person's level of education.
Where Retirement Savings Come From
Americans save for retirement in various ways, both within and outside of tax-advantaged retirement accounts, such as employer-based 401(k) plans. The Federal Reserve’s data include “individual retirement accounts, Keogh accounts, and certain employer-sponsored accounts, such as 401(k), 403(b), and thrift savings accounts,” among others. The table in the next section shows the average amount people have in their retirement accounts.
But that isn’t necessarily all that they have. Some families, especially more affluent ones, also own individual stocks, bonds, and other kinds of investments that they’ve mentally earmarked for retirement. Homeowners may also see the home equity they’ve built up over the years as a potential source of funding for retirement, which they can draw upon either by selling the home or through a home equity loan, a home equity line of credit, or a reverse mortgage. Similarly, small business owners may consider their businesses to be assets that can one day be converted into cash for retirement.
On the other hand, many people appear to have no retirement savings. As of 2022, just 54.3% of American families had a defined-contribution retirement plan or individual retirement account (IRA).
Perhaps not surprisingly, the participation rate in such plans varies substantially by income. Among the highest earners (top 10th percentile), 93% had retirement accounts, while only 13.4% of the lowest earners (less than 20th percentile) did.
But upcoming changes to the rules, thanks to the SECURE 2.0 Act, mean more people will be automatically enrolled in a defined contribution retirement plan with contributions of at least 3% of their income unless they proactively opt out. There’s at least some evidence to suggest that automatic enrollment increases savings among younger groups, lower-paid employees, and non-White racial groups.
Average Retirement Savings by Age
Retirement savings also vary dramatically from one generation to another. And there are several ways of looking at what people consider “average.” One is the simple average, which statisticians refer to as the mean. Computed by adding up all of the data and dividing it by the number of data points, it is shown in the middle column of the table below.
The second way is to find the median, shown in the far-right column. It represents the midpoint of the data. For example, the median retirement account balance of $18,800 in the table indicates that 50% of people in that age group had less than that much and 50% had more.
The mean can be distorted by significantly higher or lower outliers, so the median is often a more reliable benchmark. The mean for each age category is significantly higher than the corresponding median.
| Average and Median Retirement Account Balances, by Age | ||
|---|---|---|
| Age Group | Average (Mean) Retirement Account Balance | Median Retirement Account Balance |
| Under 35 | $49,130 | $18,880 |
| 35-44 | $141,520 | $45,000 |
| 45-54 | $313,220 | $115,000 |
| 55-64 | $537,560 | $185,000 |
| 65-74 | $609,230 | $200,000 |
| 75 and up | $462,410 | $130,000 |
Factors Influencing Retirement Savings
A variety of factors affect how much people are able to save for retirement. Retirement plan participation is highly correlated to income. Age also plays a role, as does a person's level of education.
In the case of age, younger people tend to earn lower salaries than their older peers, giving them less money to put into retirement savings. Many are also paying off student loan debt.
Some savings differences vary with a person's level of education and how that impacts their earning potential. In the Federal Reserve study, just 17% of those without a high school diploma had retirement accounts, compared with 38.5% of high school graduates and 74.9% of college graduates. This could be a reflection, at least partly, of the fact that their employers may not offer a defined contribution retirement plan like a 401(k), or that their income levels prohibit them from having discretionary income they can afford to invest for retirement.
So, while some Americans don't save for retirement because they see no reason to, many non-savers simply can't afford to. A 2024 Transamerica Center for Retirement Studies survey found that 52% of workers agreed with the statement, "I don't have enough income to save for retirement."
Interestingly, that sentiment crossed generations, with 56% of Generation Z, 52% of Millennials, 55% of Generation X, and 43% of Baby Boomers agreeing that income was an obstacle.
Calculating Your Retirement Needs
Comparing your retirement savings to the national averages and medians can give you a sense of where you stand, but it only tells you so much. Other factors, such as when you plan to retire and the lifestyle you envision for yourself, can be more important.
One useful exercise is to estimate your likely retirement expenses. You can start by adding how much you spend now, broken down by budget category. Once you leave full-time employment, some expenses will decrease or disappear (such as commuting costs), while others are likely to rise (such as healthcare and vacation travel).
The next step is to add up your likely retirement income from all sources, including Social Security, traditional pensions, retirement plan withdrawals, part-time work, etc.
Then, compare those two figures. You could be all set if your income is likely to meet your needs. If not, you'll have to figure out ways to cut your costs, boost your income, or come up with a combination of the two.
How to Increase Your Retirement Savings
The most obvious way to increase your retirement savings is to spend less of your income now and invest more of it for the future. That can require some scrimping and may be easier said than done, depending on how tight your budget is.
There are also some other ways you might find more doable and less painful. For example:
Set aside a good portion of any future raises or bonuses for retirement savings. Ditto for any other "found money."
If you earn freelance or part-time income, save some of it for retirement. A SEP IRA is ideal for this purpose.
Boost your retirement plan contributions at work. If you have access to a defined contribution plan, put away the maximum you can contribute to a 401(k) plan. That is is $23,500 in 2025, if you’re under age 50 or $31,000 if you’re 50 or older. But if you’re between the ages of 60 and 63 you can contribute $34,750. Check these figures each year in the fall, as they tend to rise
Take advantage of any matching contribution your employer offers. Even if you can’t afford to max out your 401(k), aim to contribute enough to get every penny of the match because that’s free money.
Invest smartly. Make sure your retirement savings portfolio is well-diversified and appropriate for your age. In general, younger people can invest more aggressively and older ones should be more conservative.
Try to leave your savings alone. While you can tap into your retirement accounts early if you have to, taxes and penalties can be involved, and you’ll have that much less money saved for the future when you might need it even more.
The Bottom Line
Many Americans have a substantial amount of money saved for retirement. Others have no retirement savings at all. The rest fall somewhere in between. Knowing where you stand relative to others in your age group is one way to gauge whether you're on track to have enough money when you need it or to start saving more.
However, even if you’re on par with others in your age group, you may not be saving enough. For example, using the 4% rule, with a $1 million portfolio, you can withdraw $40,000 per year, adjusted for inflation. Add in Social Security (the average monthly benefit for a retired worker as of November 2024 is $1,925.46), and that may be enough. Or it may not be, depending on a host of factors, including your desired lifestyle.
Remember, the average and median figures stated above aren't at $1 million. (According to Vanguard, the average account balance for someone age 65 or older was $272,588. The median balance was $88,488.)
The secret of successful retirement savers is no big mystery: Start saving as early as possible and continue regularly and consistently.