How Much Savings Middle-Class Retirees Have, According To Most of America

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Saving for retirement looks different for everyone, even those with similar incomes and net worths.

To give you a better idea of how much to save and how fellow Americans are positioned for retirement, GOBankingRates surveyed 1,000 working Americans aged 21 and older. Conducted at the end of 2024, the survey covered various topics, including current 401(k) balances and beliefs about what middle-class Americans need to retire comfortably.

American Beliefs About Middle-Class Retirement

To understand public beliefs about retirement savings, we asked how much the typical middle-class American has saved by age 65. The responses revealed a wide range of views shaped by age and financial perspectives.

Our survey found that younger respondents (ages 21-34) were more likely to believe retirees have less than $50,000 saved, with 25.95% holding this view. This perception remained consistent across other age groups, with 29.47% of those aged 35-44 and 25% of those aged 55-64 also selecting this range. In contrast, fewer respondents expected higher savings: only 13.92% of younger respondents believed retirees had saved between $300,00 and $500,000, and just 3.16% thought retirees surpassed $1 million.

These findings express significant uncertainty about retirement readiness. While some respondents may base their views on personal experience, others might lack awareness of expert recommendations, which often suggest saving 10-12 times one’s annual income, a benchmark far beyond what most perceive as typical. This disparity reveals to us the need for clearer guidance on what’s truly necessary for a financially secure retirement.

Actual 401(k) Balances

The current state of Americans’ 401(k) balances highlights significant disparities across age groups:

• Ages 21 to 34: 19.6% have less than $25,000 saved, while 32.91% report balances between $50,001 and $100,000. Only 10.76% have saved $100,01 to $500,000, and none have surpassed $500,000.
• Ages 35 to 44: Savings improve slightly, with 17.24% having between $100,001 and $500,000. However, 20.69% still have $25,001 to $50,000 saved.
• Ages 45 to 54: 20.87% have $100,001 to $500,000 saved, but 16.54% still have less than $25,000.
• Ages 55 to 64: 17.19% have between $100,001 and $500,000, and only 5.79% have over $500,000 saved.
• Ages 65 and over: 24.68% have balances between $25,001 and $50,000, but 19.48% do not have a 401(k) at all. Nearly 8% claim to have over $500,000 in their 401(k).

Younger respondents are, of course, still building their retirement savings, while older groups often fall short of financial benchmarks. Middle-class Americans vary widely in living expenses and goals, making it hard to pinpoint a universal savings target. While experts suggest benchmarks like saving 10-12 times your annual income, these guidelines depend heavily on personal circumstances such as lifestyle and retirement plans. Aligning savings strategies with individual needs is key to closing the gap between goals and reality.

Bridging the Gap Between Savings and Retirement Needs

The data highlights a pressing need for Americans to increase their savings rates. Here’s how individuals can close the gap:

1. Increase contributions gradually: Fidelity recommends saving at least 15% of your before-tax income yearly towards retirement. If this feels daunting, start small and increase contributions annually by 1% until the target rate is reached.
2. Maximize employer matches: For those with employer-sponsored plans, failing to contribute enough to receive the full match is leaving free money on the table.
3. Monitor progress: Regularly reviewing 401(k) balances and adjusting contributions based on goals can help keep savings on track.
4. Seek expert guidance: Consulting a financial advisor can provide personalized strategies to optimize retirement savings.

A Call for Better Planning

Modest contributions and low balances risk leaving retirees financially vulnerable. These findings highlight the importance of proactive planning and disciplined savings. While this data focuses on 401(k) balances, it’s important to note that not all retirement savings are tied to these accounts. Many retirees rely on alternative methods such as IRAs, pensions, annuities or even real estate investments to fund their retirement years. Additionally, those who are already retired may lean on Social Security benefits or personal savings outside of formal retirement plans. 

The data presented here offers a rough snapshot of where Americans stand with retirement savings, but it’s crucial to consider these additional financial options and your situation when assessing financial readiness. By focusing on consistent contributions and setting realistic goals, middle-class workers can work toward a more secure and well-rounded retirement.

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