A staggering new report reveals that the median retirement savings for American workers is a mere $955, raising serious concerns about financial security in later years.
A 2023 study by the National Institute on Retirement Security (NIRS) found that among American workers aged 21 to 64, including those with no savings, the median amount saved in defined contribution plans like 401(k)s is just $955.
This figure comes from a comprehensive analysis of retirement preparedness across the United States. It highlights a troubling gap between current savings and recommended targets set by Fidelity, a leading financial services firm.
Among those who have saved at least $1 in a defined contribution plan, the median savings jumps to $40,000. However, the average balance for all workers aged 21 to 64, including those with nothing saved, is $93,229.
For those with positive retirement wealth, the average savings is significantly higher at $179,082. Yet, these numbers still fall far short of Fidelity’s age-based guidelines for retirement readiness.
Fidelity suggests workers should save their annual income by age 30, three times their income by age 40, and up to ten times their income by the normal retirement age of 67. The Post reports data show that none of the respondents meet or exceed these age-based targets.
Across all respondents, the median retirement savings in defined contribution plans represent just 4% of Fidelity’s savings targets. Even when factoring in net worth, the median percentage rises only to 41% of the target.
Among those with some savings in a defined contribution plan, the median percentage reaching the target is still a dismal 18%. Disparities also emerge across gender, race, and education levels.
For instance, men’s median savings as a share of their target is 19%, while for women it’s slightly lower at 17%. By race, Asian workers fare best at 23%, followed by White workers at 20%, with Black and Hispanic workers each at 11%.
Education level further reveals a stark divide in retirement preparedness. Workers with a high school education or less have median savings at just 10% of their target, while those with master’s, doctorate, or professional degrees reach 26%.
Those with associate degrees hit 15% of their target, and bachelor’s degree holders manage 21%. These gaps underscore how access to education often correlates with financial outcomes later in life.
The issue has sparked significant concern among financial experts and everyday Americans alike. As NIRS noted, “As expected, those with some amount of savings are closer to their savings target than those with no savings.”
They added, “But even for those with savings, these amounts are quite low if the expectation is that retirement savings in a DC plan will constitute an important source of retirement income.” This sober assessment points to a looming crisis.
For a center-right audience wary of government overreach, this data signals a need for personal responsibility and market-driven solutions over reliance on public programs. Retirement security isn’t just a personal issue—it’s a cornerstone of economic liberty.
Start by maximizing contributions to 401(k) plans, especially if your employer offers a match—it’s essentially free money. Explore low-cost index funds to build wealth over time, and cut unnecessary expenses to redirect funds into savings now.