Nearly half of American households have no retirement savings (2024)

FAQs

Nearly half of American households have no retirement savings? ›

According to the Survey of Consumer Finances, in 2022 almost half of American household retirement savings accounts were empty. The accounts included individual retirement accounts; Keogh accounts; certain employer-sponsored accounts, such as 401(k), 403(b), thrift savings accounts; and pensions.

Among the chief shortfalls of the U.S. retirement system is access to a workplace retirement plan, experts said. About half of workers don't have access and are unlikely to save for retirement outside a 401(k)-type plan, they said.

Another big part of the problem when it comes to saving for retirement is that savings plans are not universally available in the U.S. Almost half of private sector employees ages 18 to 64, or 57 million Americans, do not have the option to save for retirement at work.

What are the average and median retirement savings? The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000. Taken on their own, those numbers aren't incredibly helpful.

As families continue working to make ends meet, a report from USA Facts reflects that almost half of American households have no retirement savings. According to the Survey of Consumer Finances, in 2022 almost half of American household retirement savings accounts were empty.

This is up from 27 percent of people in 2022. Note: Not all percentages total 100 due to rounding. Also, nearly one in four (22 percent) U.S. adults said they have no emergency savings. Despite economic challenges, the percentage remains relatively unchanged year-over-year.

Without savings, it will be difficult to maintain the same lifestyle an individual had in working years. Some retirees make adjustments by: Moving into a smaller home or apartment. Reducing television or streaming services.

The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately: $60,000 in transaction accounts (including checking and savings) $127,000 in certificate of deposit (CD) accounts.

The survey found that about 37% of retirees say they have no retirement savings, up from 30% in 2022, and only about 12% have at least the recommended $555,000 in savings. The high percentages of retirees with little to nothing saved may have to do with factors beyond their control.

Why don t Millennials save for retirement? ›

By some measures, millennials lag on retirement preparedness and net worth relative to older generations such as Gen X and baby boomers. There are many reasons for this, such as a shift away from pensions toward 401(k) plans and high student debt burdens.

Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

As a result, an oft-stated rule of thumb suggests workers can base their retirement on a percentage of their current income. “Seventy to 80% of pre-retirement income is good to shoot for,” said Ben Bakkum, senior investment strategist with New York City financial firm Betterment, in an email.

How long will $1 million in retirement savings last? In more than 20 U.S. states, a million-dollar nest egg can cover retirees' living expenses for at least 20 years, a new analysis shows. It's worth noting that most Americans are nowhere near having that much money socked away.

The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.

Saving is hard. Few jobs offer traditional pensions anymore. A 401(k) puts the burden of financial management largely on the employee. And Social Security is a labyrinth of complex regulations and difficult calculations, administered by a seemingly indifferent bureaucracy.

They believe it's too early – Money needs time to grow. The sooner you start saving for retirement, the lesser the amount you will need to save every month, and the more the time your money will have to grow. In short, the sooner you start, the better the chances you will achieve your retirement goals.

What are two reasons Americans don't save more for retirement? Aside from inflation, respondents cited stagnant or reduced income, new expenses and the desire to keep more cash on hand as key reasons they're not saving more.

Financial security

They may be concerned about running out of money, not being able to afford healthcare, or not being able to maintain their current lifestyle (or achieve their dream retirement lifestyle).