If you were asking yourself “how much do I need to retire,” or “what financial traps should I look out for?” Then you’ve come to the right place! The following retirement savings statistics provide an extensive overview of the average, decent, and bad retirement practices, as well as provide the answer to the burning question — how much to save up for your golden years to lead a decent life (both in sickness and in health)? Are you really on-track with your retirement savings, and if not, what should you do? Invest heavily in your health, or pray for better times? Risk it, or frugally save each and every penny?
Find out all the answers and more in the stats below!
Top 10 Core Retirement Savings Statistics and Facts
- Merely 1 in 5 US workers is planning to fully retire by the age of 65.
- Recommended retirement saving rates vary greatly — between 10% and 27% (depending on age).
- Depending on your place of residence, $1 million in savings may not be enough to retire.
- The average social security payments to retirees are only $15,619 per year.
- 50% of Millennials are planning to put only 6% of their income into their retirement funds, the latest retirement plan statistics reveal.
- 21% of Americans older than 65 live in poverty.
- 13% of Americans older than 60 don’t have any kind of retirement savings.
- 27% of those aged 45–59 had $250,000 in their retirement economies.
- About 50% of those aged 65 or older receive less than $24,224 in individual retirement income.
- The mean retirement savings of 401(k) plans reached a record high of $112,300 at the end of 2019.
Latest US Retirement Savings Statistics
1. 44% of non-retirees think that their retirement plan is off-course.
(Federal Reserve) (Statista)
On the other hand, just 36% of US adults currently in the workforce believe that their retirement savings are adequate; the remaining 20% of respondents said that they were uncertain about it.
Furthermore, according to a different survey by Statista, only 23% of workers were “very confident” that they would have enough money for retirement.
Conversely, 67% were “very or somewhat confident,” and around 10% believed they were completely off-track.
2. Retirement statistics show that just 1 in 5 US workers are planning on fully retiring by the age of 65.
A 2018 TCRS survey of 5,923 workers in medium for-profit companies revealed that 43% of them were thinking of surpassing the average retirement age with a phased-out transition into retirement.
In other words, gradually reducing working hours (27%) or working in a different capacity (one that is less demanding and more satisfying) for 16% of respondents.
In order to survive financially, 22% plan on continuing their working life in full capacity for as long as they possibly can.
3. 14% of non-retirees rely on real estate to boost their retirement savings, statistics from 2019 reveal.
In 2019, the majority of non-retirees with saving plans for retirement (54%) had a defined contribution retirement plan such as the 401(k) or a 403(b) plan.
Non-retirement saving accounts took second place and were used by 42% of non-retirees in 2019.
An IRA was reportedly used by 33% of respondents, and 22% of them used a defined benefit pension. Another 7% relied on a business for their retirement savings, and 14% on their real estate.
As much as 26% of respondents reported having no retirement savings whatsoever.
4. The recommended retirement savings by age vary greatly — between 10% and 27% (depending on age).
The Retirement Research Center at the Boston College calculated just how much a person has to save for retirement. For medium-wage workers that want to receive at least 70% of their final salary when they retire at the ripe old age of 65, the following applies:
- 10% of their salary for retirement funds at the age of 25.
- 15% of their salary for retirement funds at the age of 35.
- 27% of their salary for retirement funds at the age of 45.
5. $1 million in savings may not be enough to retire, the average retirement savings by state stats indicate.
(CNBC) (The Motley Fool)
The answer to the question “how much money do you need to retire” is no longer $1 million, according to a recent report by GOBankingRates.
New calculations reveal that $1 million may be enough to get by for only 12 years, depending on where you live.
Likewise, The Motley Fool revealed that Mississippi was the most affordable state for retirees at $618,000 — based on the general costs of living and how much it costs to retire — followed by Tennessee ($661,000), Alabama ($713,000), Oklahoma ($724,000), and Arkansas ($728,000).
6. The average social security payments to retirees are only $15,619 per year, retirement savings statistics point out.
(Pension Rights Center)
This represents roughly two-fifths of their earnings before retirement (or 40%).
For retirees in June 2019, the monthly average Social Security payment was just $1,471.
The maximum social security payments for those aged 66 in 2019 was $2,861, and for those aged 70 and older — $3,770.
In comparison, Americans with pensions receive around $36,270 per year, which is (at the very least) twice as much as the retirement income of those living only on social security.
7. Retirement saving statistics show that 21% of Americans older than 65 live in poverty.
Poverty rates for retirees in the US are relatively high compared to other OECD countries — the average being 12.5% out of 144 countries. Currently, 21% of those aged 65 or older in the US live in income poverty, as opposed to 17% of the population as a whole.
One of the main factors is the low employment rate among those aged 55 to 64. In OECD countries, the average increased by 14% between 2000–2016, in the US (during the same period) it increased by just 4%.
8. 40% of middle-class workers may face poverty if they retire at 62 years of age, retirement savings statistics reveal.
Projections following the stock market statistics show that around 8.5 million of those who will retire at the age of 62 will fall below the federal poverty line twofold. Meaning, most of them will receive only $23,340 individually or $31,260 as a couple.
Economists say that this is mostly due to depressed earnings, lower asset values, and increased health-care costs.
This is precisely why most Americans plan on working beyond their best age to retire, which (historically speaking) for the year 2020 is 64.22 years.
9. By the end of 2019, the average retirement savings of 401(k) plans reached a record-high — $112,300.
The average 401(k) balance of US citizens increased by $7,000 between September and December 2019, reaching an all-time high of $112,300.
The break-out data for the average 401k balance by age shows that those aged between 20 and 29 have savings of $13,200, whereas those aged 50 to 59 had an average of $188,000 in their 401(k) balances.
Americans aged 40–49 had a solid $111,100 in their 401(k) plans, and seniors aged 60–69 had an average 401(k) balance of $212,600.
Retirement Savings by Age Statistics
10. 13% of Americans older than 60 don’t have any kind of retirement savings.
(Federal Reserve) (Statista) (CNN)
The latest Federal Reserve survey, conducted between 2018 and 2019, shows an alarming number of Americans (above the age of 60) with no retirement savings or pension plans whatsoever.
In 2018, around 32% of the non-retired population below the age of 25 started putting money aside for retirement.
66% of Millennials between the ages of 21 and 32 reported having near to nothing on their retirement savings accounts.
Nevertheless, 17% of those aged 45–59, and 13% of those over 60 reported having practically zero savings for retirement.
11. Retirement savings statistics from 2016 show that about two-thirds of workers aged 26–64 participate in employer-sponsored retirement plans.
Directly, or indirectly through their spouses, nearly 66% of Americans in 2016 participated in retirement plans offered by their employers.
ICI’s data reveals that 55% of workers aged 26 to 34 participated in a retirement plan proposed by an employer, or, in turn, had a spouse who participated. By comparison, this rate was 69% for workers who were between the ages of 45 and 64.
12. When it comes to above-average retirement savings by age, workers aged 25–34 had the lowest contribution among all age groups — 10.2%.
Merely 1 in 10 young workers contribute the recommended 15% (or more) of income to their retirement savings, a fact confirmed by their credit card statistics.
What’s more, the percentage of those contributing this amount increases with age. Namely, 12.3% and 16% for those aged 35–44 and 45–54, respectively.
Naturally, the 55–64 age group has the highest participation rate with 18.3%.
13. The average American retirement savings show that Millennials are way behind the older generations.
(Business Insider) (CNBC)
When it comes to the average net worth by age, Millennials’ salaries are 20% lower than that of Boomers of the same age.
Accounting for inflation, lower return rates, and higher taxes in the future, a Millennial that has an average net worth of 80,000 has to put aside 40% of their income for 30 years to be able to retire at 65 with a 50% salary replacement rate.
14. 50% of Millennials are planning to put only 6% of their income into their retirement funds, a survey on average retirement savings by age in 2019, reveals.
What’s more, the T. Rowe Price survey for 2019 also found that merely 20% of Millennials are saving more than 15%.
The main culprit behind this trend is none other than the exorbitantly high student-loan debt that nearly 45% of Millennials are dragging over the years.
Saving for retirement can be tricky, since the average net worth by age for those between 18 to 35 years of age has decreased by a whopping 34% since 1996, and as per multiple surveys, the typical Millennial has only $5,000 in their savings account.
15. The average retirement savings in 2018 confirm that only 27% of those aged between 45 to 59 had $250,000 in their retirement funds.
The average amount of savings that Americans deem sufficient for staying on-track varies among the different age groups, according to the 2018 Federal Reserve survey.
For example, for respondents in the 18–29 age group, this amount was $10,000, and yet their personal finance statistics show that only 22% have attained this goal.
Another 22% of those aged 30–34 had $100,000 or more in their retirement savings, which is considered their threshold for good retirement savings plans.
16. About 50% of those aged 65 or older receive less than $24,224 in individual retirement income, statistics on the average retirement income by age point out.
(Good Life Home Loans)
As per the US Census Bureau, the median income of households aged 65–69 in 2019 was estimated at $54,129 per year or $4,510 per month. For those aged 70–74, it was $3,900 per month, and $2,658 per month, for Americans that were 75 or older.
As we can see, the numbers get smaller with age — hence why so many are delaying their retirement to cope with rising healthcare costs.
17. The average retirement income by age for American households aged 65–69 was $79,772 per year in 2019.
(Good Life Home Loans)
Following the figures from the US Census Bureau, the average annual retirement income for households with early retirees aged 55–59 was $103,423, and for those aged 60–64, it was $89,992.
Households aged 70–74 had a mean yearly retirement income of $68,052, and a median income of just $46,797. Those that were 75 years and older had a mean annual income of $49,614 and a $31,893 median income.
What is the average retirement savings in 2019?
According to the Fidelity Investments database, which comprises some 30 million retirement accounts, in 2019, the average retirement 401(k) balance was $112,300 as of September 2019.
The average IRA had $115,400 on its balance, and the average tax-exempted 403(b) had $93,100.
How much money does the average 55-year-old have saved for retirement?
(T. Rowe Price)
As per calculations from T. Rowe Price, a 55-year-old should have saved 5 to 8.5 times the yearly earnings they have at the present date to stay on track with their retirement plans.
This is based on the assumption that the individual has a current household income between $75,000 and $250,000, and that they retire at 65 but start earning and saving at the age of 25.
Another assumption is that their income had increased by 5% each year until turning 45 and 3% after that, to compensate for the yearly inflation rates.
How much should you have saved for retirement by age 50?
(T. Rowe Price) (Business Insider) (Statista)
It all depends on when an individual is planning to retire.
For those who started saving at 25, and are planning to retire at 67, estimates show that they must have at least 3.5 to 6 times their current salary.
The moment Americans have 25 times the amount of their annual expenses in savings, they can retire, according to Business Insider.
Yet, in order to achieve this, their saving rate needs to be higher than the average US savings rate, which in 2019 was estimated at 7.6%.
With a stock market financially plagued by the coronavirus outbreak, many are dubious of whether their retirement balances will outlive this crisis and allow them a serene retirement.
The latest retirement savings statistics show record balances in US accounts. Hopefully, these will be enough to beat the odds (and the coming economic crisis) and help older Americans retire sooner, or in the case of Millennials, more probably, later.