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

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Nearly half of American households have no retirement savings? ›

Nearly half of American households have no retirement savings, says USA Facts. The cost of living has been the topic of conversation across the country. As families continue working to make ends meet, a report from USA Facts reflects that almost half of American households have no retirement savings.

The financial services company surveyed more than 1,000 Americans regarding their retirement savings. Twenty-eight percent of respondents said they have $0 set aside for their later years.

Washington, DC; February 29, 2024—ICI's latest research shows in mid-2023, 55.5 million US households, or 42.2 percent, reported that they owned individual retirement accounts (IRAs).

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.

According to U.S. Census Bureau data, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings.

According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.

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.

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 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.

Do half Americans have no retirement savings? ›

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.

Many retirees with little to no savings rely solely on Social Security as their main source of income. You can claim Social Security benefits as early as age 62, but your benefit amount will depend on when you start filing for the benefit. You get less than your full benefit if you file before your full retirement age.

Data from the Federal Reserve's most recent Survey of Consumer Finances (2022) indicates the median retirement savings account balance for all U.S. families stands at $87,000.

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.

“By the time you're 40, you should have three times your annual salary saved. Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.”

If you retire with no money, you'll have to consider ways to create income to pay your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.

A survey by the insurance firm Prudential found that 82% of Gen Xers are not confident they'll ever be able to fully retire . But this was far from the only generation to fall behind. Twenty-eight percent of Americans aged 18 to 24 had nothing in their nest eggs, as did 25% of 55-to-64-year-olds.

Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That's especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.

Nearly one in three (30 percent) people in 2023 had some emergency savings, but not enough to cover three months of expenses. 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.

In September 2022, 55% of American workers said they felt behind and 35% felt “significantly behind.” Around one-quarter of workers haven't made retirement contributions in at least a year. 22% of American workers said they weren't making retirement contributions in 2023 or 2022.