The Average American Has Just $995 Saved For Retirement

The retirement crisis in America has reached a startling breaking point. Recent research from the National Institute on Retirement Security reveals that among all workers between the ages of 21 and 64, the median amount saved in a defined contribution plan stands at just $955 as of 2023. This shocking figure includes millions who have saved nothing at all for their golden years, painting a bleak picture of financial insecurity for aging Americans.

That figure factors in workers with 401(k) and other retirement plan savings, while also including the roughly 56 million U.S. workers who lack access to an employer-sponsored retirement plan. The stark reality is that most Americans are woefully unprepared for the day when they can no longer work, forcing many to make difficult choices about their futures. Even among those who do manage to set aside funds, the amounts fall dramatically short of what financial experts say is necessary for a comfortable retirement.

The Growing Gap Between Savers and Non-Savers

Only 64 percent of non-retirees have a retirement account like a 401(k), IRA, or defined benefit pension through an employer, while 36 percent don’t have any retirement savings at all. This divide creates a troubling two-tier system where some Americans build nest eggs while others face old age with nothing but Social Security benefits to rely on. Over half of American households report having no dedicated retirement savings according to the Federal Reserve’s Survey of Consumer Finances, and these seemingly contradictory numbers indicate that the gap between non-savers and savers is growing.

Among workers with at least one dollar saved in a defined contribution plan, the median savings were much higher at $40,000, and the average account balance was $179,082. These numbers reveal how averages can be misleading when a small percentage of high earners skew the data upward. The typical American worker, however, remains far below these benchmarks and struggles to make ends meet while trying to save for a distant future that feels increasingly uncertain.

Who Gets Left Behind

The retirement savings crisis doesn’t affect all Americans equally. The median amount of retirement savings as a share of savings targets was 19 percent for men and 17 percent for women, while among racial groups, Asian workers saved 23 percent and White workers saved 20 percent compared to Black and Hispanic workers who each saved just 11 percent. These disparities reflect decades of systemic inequalities in wages, employment opportunities, and access to employer-sponsored retirement benefits that continue to haunt vulnerable populations.

Nearly 57 million people do not have access to a retirement plan at work, even though Americans are 15 times more likely to save for retirement when they have access to a workplace plan. Workers in lower-paying jobs, gig economy positions, and small businesses often find themselves excluded from the retirement planning system entirely. This leaves them dependent on Social Security alone, which was never designed to serve as someone’s sole source of income during their later years.

The Alarming Reality for Those Approaching Retirement

Fifty-five-year-olds have median retirement savings of less than $50,000, falling significantly short of the recommended goal of having eight times one’s annual income saved by this age. With retirement looming just a decade away, these individuals face a crisis of their own making mixed with circumstances beyond their control. Two-thirds of 55-year-olds fear they will outlive their savings, compared to 59 percent of 65-year-olds and 52 percent of 75-year-olds, showing how proximity to retirement amplifies financial anxiety.

A new AARP survey finds that 20 percent of adults ages 50 and older have no retirement savings, and more than half at 61 percent are worried they will not have enough money to support them in retirement. These pre-retirees face impossible choices between continuing to work well past traditional retirement age, drastically reducing their standard of living, or depending on family members for support. The dream of a secure and comfortable retirement slips further away with each passing year.

Social Security Cannot Fill the Void

A 2025 survey by life insurer Allianz found that one in five Americans believe Social Security will provide all the income they need in retirement, when in fact it provides roughly half of the typical senior’s annual income according to the National Institute on Retirement Security. This widespread misunderstanding about Social Security’s role contributes to inadequate retirement planning. Many Americans assume the government program will cover their needs, only to discover too late that monthly checks barely cover basic expenses.

In 2024 Social Security remained the most common source of retirement income, but 81 percent of retirees had one or more sources of private income including 56 percent with income from a pension, 50 percent with interest dividends or rental income, and 32 percent with labor income, while 78 percent of retirees received income from Social Security. Those who rely exclusively on Social Security face significant financial hardship, with limited ability to afford healthcare, housing, and other essential costs that continue to rise faster than inflation adjustments to benefits.

Why Americans Cannot Save Enough

Everyday expenses continue to be the top barrier to saving more for retirement, and some older Americans say that they never expect to retire. The cost of living has outpaced wage growth for decades, leaving families struggling to cover immediate needs like housing, healthcare, childcare, and education. When monthly budgets are stretched to the breaking point, retirement savings become an unaffordable luxury rather than a necessity.

Over a quarter at 26 percent of people who are not yet retired say they expect to never retire. This represents a fundamental shift in American expectations about the later stages of life. Previous generations could count on leaving the workforce in their sixties and enjoying years of leisure, but today’s workers increasingly face the prospect of working until they physically cannot continue. The emotional and physical toll of this reality weighs heavily on millions of Americans who see no escape from the daily grind.

The Path Forward Remains Uncertain

When asked if the nation faces a retirement crisis, 79 percent of Americans agree there indeed is a retirement crisis, up from 67 percent in 2020. Public awareness of the problem has grown, yet concrete solutions remain elusive. The vast majority of Americans at 87 percent say leaders in Washington don’t understand how hard it is for workers to save for retirement, up from 76 percent in 2020, reflecting deep frustration with policymakers who seem disconnected from the struggles of ordinary citizens.

Given that millions of seniors rely on Social Security for more than half of their annual income, shoring up the program to avoid insolvency is a pressing issue, and lawmakers could address the program’s funding gap by raising the payroll tax rate, increasing the retirement age, or lifting the current cap on earnings subject to the payroll tax which in 2026 is set at $184,500. Without significant policy changes and a renewed commitment to helping Americans build financial security, the retirement crisis will only deepen as more workers age into their sixties and seventies with insufficient savings to sustain them through their remaining years.