A recent study conducted by the National Institute on Retirement Security (NIRS) highlights significant gaps in retirement savings among American workers. The research reveals that the median amount saved in defined contribution plans, such as 401(k) accounts, is just $955 for workers aged 21 to 64. This figure includes individuals who have not saved anything for retirement.
For those with positive retirement savings—defined as having at least $1 in a defined contribution plan—the median amount rises to $40,000. The average account balance for all workers in this age group is reported at $93,229, while those with at least some savings have an average of $179,082.
NIRS also compared these savings figures to targets established by Fidelity, which suggest that individuals should save their annual income by age 30, three times their income by age 40, and so on, culminating in ten times their income by retirement age. The study found that across various demographic groups, none of the median respondents met these age-based savings targets, with an overall median savings amount representing only 4% of the recommended target.
Further analysis showed that men saved a median of 19% of their target, while women saved 17%. Racial disparities were evident, with Asian and White workers saving a higher percentage compared to Black and Hispanic workers. Educational attainment also influenced savings, with higher levels of education correlating with a greater percentage of savings relative to targets.
NIRS noted that, while those with savings are closer to their targets, the overall amounts are still insufficient for expected retirement income needs.