Majority of Americans Have Little to No Retirement Savings: Experts Say When To Start

woman putting money in savings bank /

For nearly three out of four Americans, the dream of retirement is more like a fantasy.

A new GOBankingRates survey of more than 1,000 adults found that 27% of America has just $10,000 or less socked away for someday and another 37% haven’t started saving at all. Fewer than 14% have nest eggs worth six figures or more.

Those are worrisome numbers, but it’s never too late to start preparing for life beyond your earning years. Here’s what you need to know.

Start Today — Time Is More Valuable Than Money

In terms of retirement savings, Gen Z is in the worst shape of all.

Nearly 80% of the youngest adults between 18-24 have somewhere between zero and $10,000 saved, which isn’t surprising considering they’re at the start of their working years at those ages. Even so, they shouldn’t squander their crucial early years.

Thanks to the power of compounding, time truly is money, and young savers who start early with small contributions are the envy of those who start later with more.

Are You Retirement Ready?

“The sooner you start saving, the more time you have to let your savings or investments grow,” said Terry Turner, financial wellness facilitator and writer for “Both from what you put aside and from that money working for you.”

Laura Adams, MBA, a personal finance expert with, offers a hypothetical scenario that shows just how much harder it is for an older investor to get the same results as someone who starts young.

“If you invest $500 a month starting in your mid-20s and get an average 7% return, you’ll have over $1.3 million in your mid-60s,” she said. “However, if you wait until your 40th birthday, you’d need to invest $2,500 per month for 20 years to have $1.3 million to spend in retirement.”

The Choices Get Harder as Retirement Draws Nearer

On the other end of the age spectrum, older Americans are in better shape than Gen Z — but considering their all-important time disadvantage, their situation is much more problematic. More than half of those between 55 and 64 have nothing or less than $10,000, as do about 45% of people 65 and older.

The clock is ticking much faster for them than for their 20-something counterparts.

“Those closer to retirement age obviously don’t have the same advantage of a long runway, but they are typically earning more,” said Eric Blattner, CFA charter holder, CFP practitioner, wealth advisor and partner at Divvi Wealth Management. “Late starters typically have a few options when considering boosting retirement savings — save more, spend less, earn higher returns, or work longer. The first two often go together, shifting expenses to investments. And the sooner, the better. Higher returns may be possible, but we would encourage people to keep assumptions realistic and understand the potential risks of pursuing higher returns. Working longer or picking up a side job in retirement may be viable options, too.”

Are You Retirement Ready?

Sooner Is Always Better Than Later — But Save Some Cash First

What you’ve just read should make you want to put every available dollar into a retirement fund as soon as you can, but you must have at least some readily accessible cash tucked away before you get started.

“Emergency savings should be prioritized over other long-term goals like retirement,” Blattner said. “Rainy days happen, and their timing never seems great. Having a healthy emergency fund — at least three or six months of living expenses — will help weather the storm without tapping into retirement accounts, where early withdrawals may be subject to additional taxes and penalties.”

Next, Tackle Debt — But Only the Bad Kind

Before you do a full-court press to catch up on saving for retirement, work to eliminate toxic debt — the finance charges you pay on high-interest loans steal more of your money than even strong investments are likely to earn.

“Once you have at least a few thousand dollars in cash reserves, your next priority should be getting rid of dangerous or expensive debt, such as unpaid taxes, payday loans, and credit cards charging double-digit interest rates,” Adams said. “But don’t pay off low-rate loans, such as mortgages and student loans, early. They’re relatively inexpensive and also offer tax deductions, making them cost less on an after-tax basis.”

Are You Retirement Ready?

The Only Exception Is a 401(k), Which Almost Always Comes First

If a 401(k) is part of your benefits package, do everything possible to maximize your company match, even if you have no emergency savings and high-interest debt. Every dollar is free, tax-advantaged money that you just can’t afford to turn down.

“If your employer offers matching contributions, make that a top priority since you instantly earn a 50%-100% return on your contribution depending on your employer match,” said Brian Davis, a real estate investor and founder of SparkRental.

Consider Scaling Down as You Work To Build a Nest Egg

You don’t have to make a hard break from establishing emergency savings to reducing debt to building a nest egg in a 1-2-3 order. Instead, consider spreading your money around to different baskets after you establish a modest cash cushion for emergencies.

“Once you hit $1,000, start splitting your savings to go in several directions,” Brian Davis said. “Keep funneling some money toward your emergency fund each month, but that can drop to 10%-25% of your savings.”

Are You Retirement Ready?

Adrienne Davis, a CFP at Zenith Wealth Partners, agrees that you shouldn’t approach emergency savings, debt reduction and retirement savings in a rigid, first-second-last framework.

“Really, all three should happen at the same time,” she said. “Start saving automatically with your 401(k) and take advantage of your employer match. Because that money comes out of your paycheck before you even get it you’ll get used to living off of your net pay. While saving in your 401(k), you should be building your emergency fund, but also eliminating debt where you can.”

More From GOBankingRates

Methdology: GOBankingRates surveyed 1,005 Americans aged 18 and older from across the country on between January 16 and 18, 2023, asking twenty different questions: (1) Do you currently have any form of an emergency fund?; (2) How much do you currently have put away for an emergency fund?; (3) If you faced an emergency (medical, housing, etc.) how would you have to pay for it?; (4) How much do you currently have saved for retirement?; (5) Do you have any of the following debt? (Select all that apply); (6) How much debt (student loans, medical, auto/personal loan, credit card, etc.) do you currently have? (NOT including mortgage); (7) If you have a significant other, how much do you argue about money concerns?; (8) Which money topics do you discuss with your children? (Select all that apply); (9) How often do you discuss personal finance issues with your family and/or friends?; (10)What are the chances, in an average month, of you and your family running out of money before you are paid next?; (11) What worries you most when it comes to your personal finances?; (12) Compared to pre-COVID (before March 2020) are you more or less confident in your personal finances?; (13) If you received an unexpected bonus of $5,000, what’s the first thing you would do with it?; (14) If you won the lottery ($100 million), which of the following would you do with the winnings? (Select all that apply); (15) Would you rather…ask a family or friend to borrow money or max out a credit card?; (16) What would you like to learn more about in order to improve your personal finances?; (17) Do you consider yourself a spender or a saver?; (18) Which categories do you believe you overspend on? (Select all that apply); (19) How much do you spend on self care monthly?; and (20) What is your top financial priority?. GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

Are You Retirement Ready?


See Today's Best
Banking Offers