25+ Retirement Saving Statistics: The Cold Reality of Retiring

Written by Judy WongUpdated: 4th Apr 2022
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If you want to see your “Golden Years” as sunny and bright, it is time to plan now. Trying to decide how much you need, when you plan to retire and how to properly plan can feel like an overwhelming task.

Don’t despair! Here are a few things you need to know about retirement savings to keep you warm and fuzzy.

Retirement Saving Statistics: Editor’s Top Picks & What You Need to Know

  • Retirement age is currently 62 years old. The estimated retirement age for the current workforce is 64.
  • Men have an average retirement savings 107%greater than women ($118,000/$57,000).
  • Calculated in 2021, about $1.04 Million is needed for a comfortable retirement in savings, a ten percent increase from previous estimates.
  • 55% of workers plan to work during retirement.
  • The median retirement savings is $97,000, an increase from $65,000 in 2019 for all workers.

Retirement Saving Statistics – Things You Must Know to Avoid Freezing Your Retirement Dreams

#1. 42% of Americans are NOT Saving for Retirement

Don’t be a fool!

Only 58% of Americans are actively saving for their retirement. If you think that the golden years of retirement mean relaxing with your feet in the sand, traveling the world, and being happy, then you need to plan – NOW!

#2. 24% of Women Have <$10,000 in Retirement Savings

Unlike their male counterparts, women save significantly less savings for their retirement. Only 24% of women have over $250,000 in their retirement nest egg. Only 56% of women cite retirement saving as a priority compared to 62% men.

#3. Race Matters – Only 61% of Hispanic Americans and 64% of Black Americans Have Some Retirement Savings

Unlike their white counterparts, minority Americans save for retirement at a dramatically lower rate. Black seniors are almost three times as likely as white seniors to live in poverty.

Middle age or older, 43% more white families own their primary residence than black families. White families’ homes are also valued at 53% more than black families.

#4. 68% of Workers in Private Companies Had Access to Retirement Plans in 2021

75% of private company workers and 89% of government workers participated in those with a qualified plan.

In those private industries, workers in management and professional positions had the highest take-up rate at 89%. On the other end, service occupations had a take-up rate of only 59%, which coincides with the lowest access to plans at 40%.

#5. 56% of Americans Have No Idea How Much They Need to Save for Retirement

One of the biggest reasons Americans may not save enough for retirement is that they honestly have no idea how much they need or what that figure should be. Nearly 30% believe they must have at least $200,000 or more for a comfortable retirement. Unfortunately, this amount seems daunting to many, so they give up before they start trying.

#6. Taking Loans from Retirement Funds, 31% Used it To Pay Off Credit Cards

When borrowing money from a qualified retirement account, the IRS currently has a hefty penalty. Unfortunately, many Americans struggle with rising debts, and using retirement monies seems to be their only option for dealing with this problem.

Statistics show that 24% of people taking a loan from their retirement plan either lower their paycheck deduction for retirement or quit saving altogether.

#7. Nearly 350,000 IRA and 401K Plan Participants are Millionaires

As of Q1 2019, 348,000 people in the U.S. have 401K or IRA plans valued at over $1 million.

Good news! The largest sector (25%) of Americans believe they need $1 Million or more to retire. Another 22% think $500,000-$999,999 is sufficient for retirement.

#8. Americans with Both an IRA and an Employer-Sponsored Retirement Plan Have a Combined Average Balance of $307,622.

Multiple accounts with an IRA and an employer-sponsored retirement allow you to maximize your savings. People with both a retirement plan and an IRA maintain a balance three times higher than those with a single plan.

#9. 37% of Americans 50+ Say Retirement is a Financial Priority

Believe it or not, many in the fifties don’t find saving for retirement a financial priority. Nearly 63% of Americans in their 50s had more important financial concerns on their mind.

#10. Only 10% of 40-Year Olds Believe They Can Retire Comfortably

Is this population highly pessimistic, or do they have a more realistic view of the future? Unfortunately, during their prime, these Americans struggled through a recession, which most likely dampened their expectations for the future.

#11. 7.4 Million Americans Have IRA Savings

According to Fidelity, there are about 9.4 million IRA accounts. People have different IRA accounts because different types of IRA plans offer different benefits.

#12. Americans Aged 65 and Older Spent an Average of $47, 579 Annually in 2020

Retirees spent $47,259 in 2019, over 46% less than workers spending $69,099.

Although retired Americans spend less, their health care spending is significantly higher – $6,668 for retirees compared to $4,762 for workers.

Retirees, on average, spent significantly less on housing. In 2020, workers spent $23,245 on housing, and those 65 and older spent just $17,435 on housing. Much of this is attributed to retirees owning their own homes.

#13. Florida is NOT the Only State with a Large Number of Senior Citizens

Florida ties the spot with Maine, having 21% of the population 65 and older. West Virginia and Vermont come in a close second with 20% senior citizens.

According to an AARP study, more than ¾ of surveyed people wanted to remain in their community as long as possible, and an equal number wished to remain in their homes.

#14. Retirees Renting Spend 2X More Money Than Retirees Homeowning

Building wealth by buying a home will save money in the long run. Buying a home with a fixed mortgage keeps housing costs stable because rents typically increase over time.

#15. 49% of Baby Boomers Plan to Fund Retirement with Social Security

Social security is a very hot-button topic.

As the millennials and GenXers are planning for retirement, fewer are considering social security as the sole way of funding retirement. Only 29% of GenXers and 20% of millennials saw these government-funded retirement plans as a viable option for retirement income.

#16. The Majority of People in an AAG Survey Plan to Retire 65-70 Years Old

Over one-third of those surveyed plan to retire between 65-and 70. Surprisingly, the second highest group was 60-65 at 29%. Believe it or not, some did not plan to retire at all – only 6% of survey participants.

#17. Net Worth of Households Aged 65-74 is $1,217,700

The national average household net worth is $748,800. So, senior citizen households have an average net worth of 63% greater than the national average.

#18. Savings or Investments are a Major Source of Income for 2/3 of Retirees

Although most retirees see social security as a significant source of income, over 66% also use savings or investments as additional income.

#19. 44% of Workers Very Confidently They Will Live Comfortably in Retirement

Although only 44% are “very confident,” when you add the “somewhat confident,” the total jumps to 89% of those believing they will live comfortably in retirement.

Great to see people believing that the “golden years” will truly be golden.

Millennials don’t agree. This generation plans to flood the “Golden State” and retire in California.

#21. Two Thirds Women and One Half of Men Look Forward to Volunteering in Retirement

Many wonder what they will do when the 9 to 5 J-O-B is done. Besides volunteering, about 53% of men and 33% of women plan to golf during their retirement years.

Women are more likely to spend time with family, while men prefer to travel in retirement.

#22. Furry Friend (s) Get to Retire Too With 68% or More of Retirees

Many retirees want a pet companion during these golden years.

In those polled, 80% of women and 75% of the men wanted to keep a pet while retired. The baby boomers had the lowest percentage (68%) while GenXers and Millenials were higher at 80% and 83%, respectively.

#23. Working Past 65 Years of Age a Reality for 78% of Americans

Nearly 78% of Americans will work even though they have reached the golden age of 65 because they do not have enough retirement savings.

#24. 13.5% of Annual Salary Contributed to Qualified Retirement Plan by Employer and Employees

Many employers contribute to an employee’s retirement fund (401K, 403B, IRA) in the form of a match. These employers often stipulate that an employee must contribute first. The employer will then match dollar for dollar up to 6%.

Although many employers only contribute a 3% match, the total contribution is trending upwards to 15%. Most financial planning experts recommend a total contribution of 15% annual salary.

#25. 36% of Americans Take Cash Out of Retirement When They Lose Their Jobs

Taking out a retirement account is problematic, although sometimes it seems unavoidable.

They’re hefty tax penalties for this early withdrawal. 42% of people under 30 choose full distribution when jobless.

#26. 401(k) Programs Open for >10 Years Have Increased in Value by 466% (2019)

One key to retirement investments compounding is time. Another component in successfully funding retirement is consistency. Looking at the increasing values of 401(k) accounts, it is important to note that the plan participants consistently funded the accounts month after month.

Frequently Asked Questions

What Does the Average American Have Saved at Retirement?

The average American has a net worth of $1,217,700 when they retire. How much is actually in liquid assets such as checking accounts, savings accounts, 401 (k) plans, and IRAs?

For the Baby Boomers, many plan to fund retirement using social security (49%). The other sources include pension (16%), savings (12%), investments (11%), personal 401 (k) (7%) and other (5%).

Although these individuals have a net worth of over $1.2 million, some of this wealth comes from equity in their primary residence. This is much higher than the national average net worth of $748,800.

How Much Does the Average Retired Couple Have in Savings?

Although total savings is unknown, the average 401(k) savings balance for 55- to 64-year-olds is $496,853. Assuming these people retire between 65-and 70, their balance will be this or greater (assuming a conservative investment portfolio).

What State Has the Most Retirees?

With the most retirees, Florida shares this spot with Maine at 21%. West Virginia and Vermont come in a close second with 20% of seniors over 65.

Bottom Line: Retirement Saving Statistics

The key to retirement saving boils down to our friend Benjamin Franklin, “If you fail to plan, you plan to fail.”

Unless you plan to win the lottery and you’re the one in a billion who succeeds, you must plan day after day, week after week, and month after month for retirement. The financial security to retire comfortably comes from a well-thought-out plan.

If you feel you haven’t saved adequately for retirement, don’t worry. The best time to start is right now.

Sources:

Judy Wong
Judy Wong

Judy Wong is a Writer and Researcher for SimpleMoneyLyfe with a love for mortgages, retirement savings, and personal finance. Judy’s added value is she is a house-flipper, landlord, and real estate investor. As a mom of four living in Charlotte, NC, Judy strives to create articles that can be used to teach financial literacy nationwide. She aims to craft easy-to-read, engaging articles about complex subjects.