Study Reveals American Workers Lagging in Retirement Savings Goals

A recent study reveals that the median American worker has only $955 saved for retirement through defined contribution plans, such as a 401(k) account. Alarmingly, most individuals are falling significantly short of the recommended retirement savings targets for their respective ages.

Conducted by the National Institute on Retirement Security (NIRS), the study indicates that among workers aged 21 to 64, including those who have not saved anything for retirement, the median amount saved in a defined contribution plan stands at a mere $955 as of 2023.

In contrast, for those who have accumulated some retirement plan wealth—defined as having at least $1 saved in a defined contribution (DC) plan—the median savings jumps to $40,000. The report further highlights that the average account balance among all workers aged 21 to 64, including those with no savings, is $93,229. However, for those with at least $1 in a DC plan, the average savings soar to $179,082.

A woman talks on her phone while using a laptop in her home. (Getty Images / Getty Images)

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The NIRS study also compared Americans’ retirement savings balances against benchmarks established by Fidelity, which recommends savings based on age and income levels. Fidelity suggests that Americans should aim to save their annual income by age 30, three times their income by age 40, six times by age 50, eight times by age 60, and ten times by the normal retirement age of 67.

However, the NIRS study found that none of the median respondents across various demographics—age, race, education, and gender—met their age-based savings targets.

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The NIRS study showed most Americans were well behind their age-based savings targets. (Istock)

Across all respondents, the median amount of DC retirement savings represents just 4% of their savings targets. When considering net worth instead of DC retirement savings, the median percentage of respondents meeting their savings target rises to 41%. Among those with positive DC retirement balances, only 18% hit their savings target.

HERE’S HOW MUCH TRUMP ACCOUNT BALANCES COULD GROW OVER TIME

The median American in all demographic groups lagged behind the savings targets. (iStock / iStock)

The median amount of DC retirement savings as a share of the savings target is 19% for men and 17% for women. Among racial groups, Asian (23%) and White (20%) workers save more than Black and Hispanic workers (11% each). Additionally, savings increase with higher levels of education: from 10% for those with a high school education or less, to 15% for those with associate degrees, 21% for bachelor’s degrees, and 26% for advanced degrees.

Among age groups, the most successful savers are the youngest cohort of workers aged 21 to 34, who have saved 21% of their target, followed closely by 19% of workers aged 55 to 64.

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“As expected, those with some amount of savings are closer to their savings target than those with no savings. However, even for those with savings, these amounts are quite low if the expectation is that retirement savings in a DC plan will constitute an important source of retirement income,” NIRS stated.

A recent study reveals that the median American worker has only $955 saved for retirement through defined contribution plans, such as a 401(k) account. Alarmingly, most individuals are falling significantly short of the recommended retirement savings targets for their respective ages.

Conducted by the National Institute on Retirement Security (NIRS), the study indicates that among workers aged 21 to 64, including those who have not saved anything for retirement, the median amount saved in a defined contribution plan stands at a mere $955 as of 2023.

In contrast, for those who have accumulated some retirement plan wealth—defined as having at least $1 saved in a defined contribution (DC) plan—the median savings jumps to $40,000. The report further highlights that the average account balance among all workers aged 21 to 64, including those with no savings, is $93,229. However, for those with at least $1 in a DC plan, the average savings soar to $179,082.

A woman talks on her phone while using a laptop in her home. (Getty Images / Getty Images)

AMERICANS SURGE TOWARD FINANCIAL RESOLUTIONS FOR 2026 AMID HOUSEHOLD BUDGET CONCERNS

The NIRS study also compared Americans’ retirement savings balances against benchmarks established by Fidelity, which recommends savings based on age and income levels. Fidelity suggests that Americans should aim to save their annual income by age 30, three times their income by age 40, six times by age 50, eight times by age 60, and ten times by the normal retirement age of 67.

However, the NIRS study found that none of the median respondents across various demographics—age, race, education, and gender—met their age-based savings targets.

IRS REVEALS UPDATED CONTRIBUTION LIMITS FOR 2026

The NIRS study showed most Americans were well behind their age-based savings targets. (Istock)

Across all respondents, the median amount of DC retirement savings represents just 4% of their savings targets. When considering net worth instead of DC retirement savings, the median percentage of respondents meeting their savings target rises to 41%. Among those with positive DC retirement balances, only 18% hit their savings target.

HERE’S HOW MUCH TRUMP ACCOUNT BALANCES COULD GROW OVER TIME

The median American in all demographic groups lagged behind the savings targets. (iStock / iStock)

The median amount of DC retirement savings as a share of the savings target is 19% for men and 17% for women. Among racial groups, Asian (23%) and White (20%) workers save more than Black and Hispanic workers (11% each). Additionally, savings increase with higher levels of education: from 10% for those with a high school education or less, to 15% for those with associate degrees, 21% for bachelor’s degrees, and 26% for advanced degrees.

Among age groups, the most successful savers are the youngest cohort of workers aged 21 to 34, who have saved 21% of their target, followed closely by 19% of workers aged 55 to 64.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“As expected, those with some amount of savings are closer to their savings target than those with no savings. However, even for those with savings, these amounts are quite low if the expectation is that retirement savings in a DC plan will constitute an important source of retirement income,” NIRS stated.