Average American has just $955 saved for retirement, study finds
Most workers who aren’t saving for retirement through their employers aren’t saving at all, the study found
New data suggests the average American worker has under $1,000 saved for retirement.
A report from the National Institute on Retirement Security found that the median savings for all employed adults between the ages of 21 and 64 were approximately $955. The study includes workers with 401(k) and other retirement savings plans, as well as the approximately 56 million workers who do not have access to employer-sponsored retirement plans.
Workers with retirement savings plans have a median balance of approximately $40,000 saved, according to the report. That figure is nowhere near the $1.5 million that Americans say they need to feel comfortable fully retiring.
https://www.the-independent.com/us/money/americans-retirement-savings-study-b2915703.htmlOpen linkView original on lemmy.world
I'm sure the situation is dire, but I'm not sure it communicates an accurate picture by lumping in 21 year olds with people who've been in the workforce for decades.
21 yr olds who are just entering the workforce or are in college aren't expected to have much, if any, retirement savings at that stage in their lives.
A better picture would be to break it down by age group. Still not a pretty picture, I'm sure.
They've done that in the research, it's just a clickbait headline with very, very light details. After following a few clicks I found the PDF [1] in which they break it apart by many groups and factors (age, race, savings plan, income, student loan debt, all sorts of stuff) and that $955 figure falls under the "workers who do not have $1 in a DC" (meaning workers with no access to a savings plan). For those with access, the number is $40,000 average.
[1] https://www.nirsonline.org/wp-content/uploads/2026/02/NIRS_2026-Retirement-in-America-FINAL.pdf
Which is both in the article and OP summary.
$40,000 still approaches zero. Its one or 2 years of expenses at best.
Why, you're welcome for the link to the PDF! I'm glad you enjoyed reading it and appreciate your insightful and loquacious feedback on the matter at hand. You are a true gem of the lemmyverse, evenglow.
Median and average are not the same. Median is going to be skewed very low compared to average in this case.
I didn't start having meaningful savings until my mid 20s. When i bought a house paying off the mortgage became a priority over saving for retirement. I'll be better off paying less interest and reducing my expenses faster than I would be collecting interest on that money. In theory i could out perform my mortgage interest rate by trading stocks, but that is a lot riskier than paying off the mortgage.
Trading stocks is probably the worst investment strategy any normal person with a market-unrelated job and life responsibilities could pursue, with almost guaranteed losses in the long term. Good on you for identifying the high risk early in life- never forget it. That being said, there's very strong arguments for investing in stocks, but do it the boring way: large blended ETFs with a low expense ratio (like VTI, VTV, VOO, VXUS, or the Boglehead favorite: VT) or mutual funds. Don't "trade," buy and hold and try to forget you even have a brokerage account housing those blended, diversified funds. Try to use tax-advantaged vehicles as much as possible, like a Roth IRA or a Roth option in a 401k. Your mortgage APR is what? 4-7%? The market should definitely outperform that in the long term, and you can reduce your exposure to acute transient shifts even more by dollar cost averaging into your savings. I'm all for paying off debt as quickly as possible, for the psychological benefit, but there's also the rate race of your investment's probable APY vs your debt's APR.
I've been diversifying into some long term stock options in some of my savings accounts. I live quite frugally so I am able to still save a bit while paying a bit extra to my mortgage. So far I've done pretty good in the markets but my trading accounts aren't significant sums of money, when they do well I sometimes wish I invested more but when a stock is down bad I'm reminded why I keep those sums low.
People underestimate what even $50 a month can do over time. Sure it might not be down payment money but it could be enough to build a safety net so you can try a new job or move somewhere else with a bit more behind you.
This is still a shockingly low number. If you graduate with a bachelors and get a job our of college and contribute to a 401k, you should easily hit 1k saved within a year. If you didn't go to college and started working at 18, you'll be making less, but should still be able to save 1k by 22. Even shitty employers have retirement programs, it's just that most hourly workers won't take the time to sign up. There's only one way the median can be 1k, and that's because at least 40% have $0 saved and the whole system is completely broken for them.
This also seriously depends on the employer. One of the first things that gets slashed during benefit cuts is reitrement accounts, because they're an easy target and you're not "losing" the money.
Wouldn't surprise me at all if the average retirement savings of those in their 50s is like $100,000
Not a bad guess at all.
I'm slightly heartened to see the average is higher than I thought
Without universal healthcare, even if you save millions, it can all be wiped out with a single illness.
The rest of the world cannot comprehend such freedom
Would they like to?
Comprehend yes, have no.
Health insurance companies are counting on it. Delay deny depose
I would say that is intended. Every day I'm more convinced that the US is the Billionaire playground where they can test out how to press the most money out of the population.
With the big police state and enormous prison capacity ready to counter the eventual revolution.
Perhaps they are suprised themselves that no one revolts as they suck more and more money out of the population and reveal more and more of the degenerate lifestyle of the elites.
"They know that we f*ck and kill children and still don't revolt? What else do we need to do? We already take nearly all their money. Well, let's destroy the pension funds, perhaps that does the trick..."
We’re modern history’s largest slave empire. These rich are the descendants of actual slavers who were brutally violent. They treat this place like a plantation. It’s part of the culture of the American ruling class.
And you guys don't have a state pension either, right?
You guys really need to get on with a revolution. Work until you die is kinda supposed to be something we are moving away from
Life expectancy keeps lowering so no need to worry about retirement.
oh thank god. Freedom from this awful system.
There's social security, which does give seniors enough to exist, but not much else.
Even SS is indexed by how much you earned as a wage-slave over your lifetime. If you've done something other than slaving for the Boss, or if your slaving has been for low pay, you get commensurately less in SS payments and the state will be happy to see you starve and freeze in old age.
That's unbelievably backwards. I had no idea America designed a system to perpetuate class divide into retirement.
The actual formula is a bit complicated, but it boils down to a few key points:
we have social security which has its own tax structure taken out and you get relative to your pay in and most people will have to spend most of it on their health expenses from the retirement universal healthcare we have that has you pay 20% unless you sign up for a scam corpo thing that doesn't allow you to get proper healthcare so is cheaper. I worked for a company with european offices and when they went through the healthcare decuctible and out of pocket and savings accounts to pay for these things and such you could see some of the folks from over there were like. Wow. That is some shit.
Fucking high rollers over there
My retirement plan is to die at work, that way my family is taken care of. (who am I kidding, my work will try to weasel out of paying them if that happens)
Your family will be lucky to get a pizza party.
“He worked so hard, we loved him. Were like family here. KThxBye.”
The pizza dough contains potassium bromate which may be carcinogenic
Learn from the French: burn shit before you get to the point of starvation.
I mean, it took starvation for them to start burning shit the first time. But at least they learned from that, and haven’t let it get as bad since then.
This is simply Americans’ first time experiencing the wrong side of the “let them eat cake” thing, so of course it’ll take a long time for America to start lighting things on fire.
well the solution is simple: deport brown people, ban trans people and give more money and tax cuts to corporations and billionaires. it'll all be over soon.
Garbage.
Tell me the average of all people who have more than zero (and the number that represents), then tell me how many have zero.
This number 955 doesn't mean shit.
Lots of people saying it's a skill issue that people aren't saving more of their earnings. The problem is much deeper: it doesn't make sense for the majority of Americans to save their money. This is the rational outcome of a political and economic system that does not offer hope, only cynicism.
I had several 401ks, I cashed them out fairly quickly because an emergency would come along and it was the only thing between me and homelessness, or not receiving medical care.
Now I have a 403(b) because I work for higher ed, and I am forbidden to cash it out, but I've taken a loan against it and paid off my credit cards, and am paying myself interest now.
So now I have my CCs freed up for the next time I have an emergency, which will be checks watch
I had almost completely strip-mined my 401k and post-tax investments by the time I was 56 due to a family member's mental-health crisis and the downstream impact of that (it was worth it: the family member in question is now stable and thriving). I'm now 70 and should be able to retire next year if some other emegency doesn't bite us on the ass before then. It took 14 years to rebuild, and that was with my wife and me both bringing in professional salaries and having additional investments.
I feel the "checking watch for next emergency"
I'm just about done paying off my last emergency so I'm right on time for the next big one. Fate seems to wait until I'm spitting distance from paying it off to taunt me or some shit.
The last time I was literally 1 month from having it paid off before BOOM $10k medical emergency and to not become homeless due to said medical emergency combined with being on FMLA for 12 weeks minus a day.
It don't like like a lot to some but for me it's been hell.
If it was a handful of people, it could MAYBE be a skill issue. But when it's most people, it's a systemic issue.
I had an argument about that with the college when I failed ochem. 2/3 of the students failed ochem that year. My argument was basically they made the tests too hard just to weed people out because I aced the lab class and always had As on my papers. Papers where you performed real world calculations not insane ones. There reply was basically yeah its a weed out class take it again or switch majors but we'll let you keep your scholarship... for now. Kept major, switched schools a year later then switched majors.
I’m not from USA so I don’t know what rates of interest your banks offer, but most here offer less than 4%, so there doesn’t seem much point for a few hundred quid.
Most private workplaces offer retirement investment accounts, that seems to be more what they mean.
In the retirement account front, just checked and for the past year it hit 19%, over the last 10 years, it's been 15% a year. Generally those are biased toward stock and move to more conservative close to retirement. I think that's generally the balance being considered, at least if you have any retirement account, it's probably larger than any other account in short order.
For "savings" account recently 4% has been available, but less so now as the central bank turns down interest rates to favor borrowers again. But I don't think they are limiting to strict savings accounts here. I think money put into an index fund or bonds or CDs would absolutely count.
If your employer offers a 401(k) match, not trying to take advantage of that is one of the absolute dumbest financial moves you can make. Yes, I understand people sometimes can’t that’s why I said “try”.
Another move is not investing early. The biggest boost to wealth in retirement is start saving early to take advantage of compounding interest.
I'll upvote for the "try". Most people I know in tight spots need the money NOW. They are barely thinking 1 year ahead let alone 40.
I know people like that too. Those same people don't know how much they spend on anything, don't know where their money is going, and waste money on entertainment (subscriptions), drugs/alcohol, it other stupid shit. I wish they were more aware of their personal finance because I'd hate to see them when they're 55 trying to figure it out at the last minute.
I will say this. It annoys me when I see stuff like. Well these folks are stupid so they deserve it. I have definately known folks who can't do whats necessary to not be messed up in the us and its part of the reason we need real social democratic systems and safety nets. The us has this thing expecting everyone to be a jack of all trades for everything and being smart about every aspect of life. Everyone can't be a doctor, a lawyers, an accountant, a mechanic, and a all the various trades needed to properly handle property. I mean look whats expected with our taxes. Its nuts. Any society should run such that people can work a job and blow their paycheck every week and still do fine. Maybe not high on the hog but have food and shelter and healthcare and transportation and education if they need it. Because if we don't we are going to just create a bunch of problems that then get duct tape type solutions which is pretty much what you see in the us.
I'm pretty broke all the time, i absolutely know where all of it's going:
6 more months and i get to have a clothing and sundries budget again
Honestly, comparing my finances to most of the people who have complained to me in person about living "paycheck to paycheck" the majority of people are trying to live middle class on working class incomes. I was guilty of it too, lifestyle creep happened.
I shake my head every time I see people overspending on consumer bullshit while complaining about cost of living like their $20/day for energy drinks is reasonable.
This is a terrible stat. Taking the people who are entering the workforce and averaging them with people who have spent a lifetime working. Not only that, but that’s just “retirement” savings. How many 20 year olds have retirement accounts?
The information would be far more realistic if it were grouped by decade of life.
Edit: Here. This is a little better
Savings
Retirement savings
Still very bleak. Nobody is retiring comfortably on $60k, much less $10k.
Might be worth factoring in SS, as that's the real practical retirement savings people rely upon.
The $60k represents remaining savings at age 80-89.
Look at the 60-69 column for what people have around the time they start retiring. But not that those are means, not median figures, so are skewed by the US's vast levels of inequality.
If by "average," they mean "mean," that's not a useful figure, since it's skewed by the disproportionate rewards going to the rich. And that's what that chart looks like. There's no way that the median for US people in their 60s is anywhere near $200k unless that involves some bullshit like imputing an NPV to their social security entitlement.
OK, so I did some searching.
Here's a more informative set of stats and charts: https://dqydj.com/retirement-savings-by-age/
The age 60-64 median according to their more rigorous methodology is $10,400, not $200k.
Median, not average, so much better at showing this situation than mean but it's still not great. I agree that it should be broken up, but the difficulty is how you define the grouping will have a significant impact on the results, especially in early and later years.
I'd prefer median by age graphed by age. Average by any grouping will skew heavily if there is a lot of variance, and I absolutely expect there is in the US. A box-and-whisker plot could also be ideal here, but you still have the grouping problem.
Still seems scarily low, especially for the USA.
Also skewed by those that will have millions.
How and why would you save as someone in the US? This country is collapsing.
You can invest in international markets if you think the US market is doomed. Still not a reason not to save. The bigger problem is that so many people simply can't afford living expenses AND saving for retirement.
With what money?
See the second half of my comment.
$955 of investments is better than $0 of investments.
No, not in any meaningful way given how rigged and broken the economy is for the average person.
$955 can buy a gun (and ammo).
In order to retire, 500k is sort of the minimum. Even with conservative spending, you'd have to be a millionaire. If you're young, multi - millionaire has to be the target for retirement. $955 is literally a rounding error on that scale. The average 64 year old retiree probably sees their investments fluctuate by several thousand every day.
Well you see, dr oz has an answer for that. Just start working earlier, and dont retire. No need to save
Life is a Crudite and we are merely sliced vegetables to be browsed over distractedly by the ultrawealthy.
Even though i'm not an a american I thought it's a very negative thing to say and considered to argue. I found I have no augment to offer.
Your money/investments/wealth isn't necessarily limited to just the US. Someone could take their assets and move to a different country and put those assets towards retirement.
The idea that you can't save because it's collapsing is just doubling down on sinking with the ship.
What a stupid, dismissive thing to say.
If you can save and get out, good for you.
The vast majority in the US cannot save and I genuinely think trying to is futile, collapse is roaring towards us and given the acceleration of climate change over the last 10 years there isn't even enough quality lifespan left for many to make saving a rational pursuit in the first place given the extreme poverty trap that the US functions as.
If we have no agency over our lives ending prematurely, the idea of us all transcending this fate through individualized saving is worse than useless.
Your orginal comment asks
implying it isn't worth it to save anything if you live there.
In the US economically the rich here will not allow the poor to have the breathing room to save, they can't or else the system of extraction here loses its essential domineering grip.
I would rather flee the country with $955 to my name than with nothing. I'm not saying its easy or a fair system but not even attempting to save because of how fucked things are is just a terrible strategy.
I don't think you understand the crushing reality of living in poverty in the US. Over 60% of the US lives paycheck to paycheck. That should make it clear that it's a systemic issue. Some people live above their means by choice, or lack of thoughtful planning. Many people live above their means because the means they have access to don't cover the cheapest of basics, so we go without. I lived off of one meal a day, all through my 20's, because that's what I could afford. Ignorant people lectured me on the importance of saving that whole time. We don't have a problem understanding the importance of saving. You have a problem understanding the class system in the US.
Past a certain point believing you can beat a horrendously rigged game designed to be as cruel as possible just blinds you to a starker reality, it is neither helpful for inducing positive systematic reform nor helpful for understanding yourself and your piled up failures in a loving light.
Invest everything you can into highly diversified, low-cost index funds and continue doing that for multiple decades. That's the how.
The why should be pretty obvious.
Why wouldn't someone save in the US?
The country is burning down? Sure. We don't know what things will look like in a year? Me neither!
But I'd rather save and invest because in 40 years things may or may not have turned out fine. And I'd have a couple million and you will have zero because "why would you save!?!?" mentality.
If you get started early enough, you don't even have to save a lot over time or even month to month. But if you wait until the last second(40s, 50s?) you'll need to be dumping thousands per month just to catch up.
This is a math problem, not an emotional one.
If you think we have 40 years before general collapse you are in for an enormous amount of unprocessed heartbreak.
https://climatereanalyzer.org/clim/sst_daily/
Ah, you're right. I'm going to go sell everything I have then go to Mexico and buy as much hookers and blow that I can and then commit suicide because everything is going to shit and nothing even matters anymore! There is no future! REEEEEEEEE!
/s
I am sorry I triggered you.
I will be so happy eating cat food years from now knowing that I was more prepared than the average person.
Smart move, acquiring the taste early. :(
I'm also one of those rare souls with a defined-benefit pension, so it will be Fancy Feast for me!
Well hello mr fancy pants! You know fancy feast is a canned brand right? You probably need to study your retirement savings carefully for this idea. Also the fancy feast cans shrank-- they are tiny now, so consider if you'll be opening more than one can per day.
JFC this is depressing. Hopefully it forces some change though. I like that post about the French boyfriend asking why we don't burn shit. Hunger will make people burn shit.
6 meals away from anarchy or sumthin
Real talk!
Soon there will be a critical mass of people who have nothing left to lose. Thats why the Democrats and Republicans need the military in the streets. Their wealthy benefactors cannot allow anything like the New Deal to happen again.
They have never wanted us to retire. They want us to work until we die.
workers will not be allowed to work until they die unless its a really menial job. Every normal mundane mistake you make as an older worker, your bosses look at you trying to decide if you are too old to do the job.
Social Security was the single greatest transfer of wealth from employers to employees in US history
Sounds like a good thing
That's why the Repulicans hate it so much.
Our lavish lifestyles include paying for food, shelter, healthcare, power and water and it keeps costing more and more but there’s record shareholder profits!!!! Yeah! You should be happy that the economy is great for pedofiles who rape children and possibly(checks notes) eat babies on yachts. Cool! they’re openly using all our tax dollars with the goal of making us working people obsolete while mass surveilling us and killing dissenters in the streets. Awesome
This is Lemmy. You can say pedophile. You can swear. You can call spades a spade without doing wrongspeak that censors you from the algorithm.
I think a bunch of people on here genuinely don't know how to spell the word.
I sure wish I had 955$ saved!
Very misleading stats. What’s the breakdown by age group? A 21-year old with <$1000 in savings is very different from a 64-year old. Talking about the “average worker” across that wide of an age range is totally meaningless. What’s the median age?
I mean 21 to 64 of all employed adults. I doubt there are so many 21 year olds that they are tipping the scales to under a grand on their own. Theoretically the mean should be especially relevant to the middle of the spectrum. I can say im later than that and drawing down savings over the last year as I have been out of work. I keep saying I know there are gonna be these articles about how gen X did not save enough for retirement and its going to be like sigh. I tried as much as I could when I could.
Well I think employed 21-year olds are a lot less likely to have any savings at all (mostly student loans) and also more likely to be working in a job with no retirement plan (working at Subway or Starbucks). Combining their situation to a 64-year old in an office job or a skilled trade is still pretty misleading.
Yes, it’s a huge problem that young people have all this student debt and lack of savings and high living expenses. But we’re not going to be able to analyze that by lumping all their numbers together with older people. If we want to make comparisons we need separate numbers.
yeah I mean even if you take 0 for them that would bring down an equivalent number of folks with 2k and we know the opposite situation occurs with c suite folks and such having real high numbers. Even then if it is 20somethings it still highlights an issue we have now that was not the case 50 years ago. 20somethings can't save at all. 30somethings if they are lucky can start to save but kinda want a house someday so wants to save some in a regular way (which is also smart. its very important to have a short term savings no matter the tax advantage of retirement savings). It they are lucky maybe they can swing the mortgage in their 40's but that puts a damper on retirement savings as well given mortage payments. So like 50's you can finally really start socking it away for your impending retirement. again if you are lucky.
There's gonna be a rash of people committing crimes in their 70s and 80s just to have a place to live and three meals a day.
They'll just have to reduce their excess spending, get a job and pull themselves up by their bootstraps! /s
watch bushcraft videos kids...
Don't tell the ultra wealthy! They'll start the ploy to "recover" what they're missing out on. Usually by funding systems to convince voters to elect someone who'll get it for them the fastest
My retirement plan is my benelli.
I wouldn't be surprised to find out that due to the political climate, this total is lower than it was, say between 2009-2017.
It's relevant context to know that while about 67% of people self-report that they are living "paycheck to paycheck" (meaning they are not actively saving any money), only 30% self-report that they are actually spending more than 90% of their income on necessities.
Point being that the majority of people who aren't actively saving, are choosing not to, spending all of their extra income instead of saving at least some of it.
As bad as conditions are overall, a significant chunk of people are making it needlessly worse for themselves, and things are not quite as dire as they're made to seem by sensationalist media that's quick to report that 67% figure, but never focuses on the 30% one that's a much better indicator of the percentage of people who are actually having trouble making ends meet.
Did you just make the Avocado Toast argument?
No. Also I specifically used the '90% of their income' figure and not the 95% one shortly mentioned thereafter, because I think it's fair that even those who are struggling the most ought to be able to have some 'fun' with their money.
But most people do earn enough to pay for their necessities, have fun, and save. And many people don't save for later, even though they easily can, in the name of putting more on the 'fun' pile.
While I think, technically, strictly correct, the big question wild be how much they could realistically "save", and in such a hypothetical, would it really be significantly more encouraging results.
Our, realistically speaking we are generally already looking at that reality, with people putting aside a relative pittance but still feeling that they live paycheck to paycheck, largely ignoring anything that goes toward retirement.
I get it, I've had relatives buy stupid expensive pickups or muscle cars with obscene payment plans while barely keeping their heads above water, but even the more careful ones barely scrape by.
Yea, just what people want to do. Spend basically on only necessities for years/decades just so they may have an opportunity to retire. Sounds like a great plan.
That's a straw man, so I'm not going to bother responding beyond pointing out the fallacy. Consider engaging with what I actually said.
I'm pretty sure I did. Where do you think the money for retirement comes from? Whatever they are spending on non-necessities. Sure, some people can do that without completely forgoing luxuries, but we're talking about the low end of income here. For any meaningful retirement, and that's a maybe, it really is forgoing any nicities for a long time.
It would have taken a lot longer for me to build the capital for a down payment if I wasn't frugal. It helped me save and invest a little extra each month.
That in no way is the definition of a straw man.
In my group of friends I describe what I feel related to this as, obsession with youth/fear of aging, and consumerism/tourism rebranded as spirituality/wellness/experiences
Necessities vary a lot by what you can afford. Internet and cell phone is pretty necessary and if you put off repairs and even renovations it can be worse long term. healthier or higher quality food. whats the long term cost of eating regular eggs vs pastuer raised. I mean there is definately a nutrient difference. What about your kids education. Anyway im just saying necessity is a very slippery slope. Air is a necessity over water which is a necessity over calories which is a necesity over vitamin C. retirment savings are long term and need to be balance with other things like home ownership and health.
Most Americans are just shitty at saving. Again, MOST, after expenses are accounted for still don't save. Skill issue.
What's confusing?
After you deduct rent, insurance, cars, gas, most Americans spend ALL the rest. I get wanting to spend some of that and enjoy life, but All? Some people are just incredibly uneducated (systematic to a degree) and shitty with self control. Another poster posted actual data but the tldr is only 30% of Americans live week to week by necessity. Again, we can and should do better but this is such a stupid stat to keep popping up.
All $81 leftover afterwards gets spent? Shocking.
Truly, I try to put at least $100 into my savings every paycheck, but sometimes the money just doesn't exist. Sometimes (like in this frigid cold winter) I need to take money out of my savings in order to cover my electricity bill.
People used to save money "for a rainy day." But these days, we live in an unending downpour. I don't know what you think people are spending all their money on, but it'd be best not to assume it's all frivolous.
Then you are in the 30%, and that sucks, and we can do better., it's shitty that you live that way with that stress.