In 2019, about half of American households had no savings in retirement accounts, according to the Survey of Consumer Finances (SCF). These accounts include individual retirement accounts; Keogh accounts; certain employer-sponsored accounts, such as 401(k), 403(b), thrift savings accounts; and pensions.
Personal saving has grown more important as employers have shifted away from defined benefit plans, or pensions, putting more of the responsibility on workers to plan for retirement. In 1989, half of working households ages 50 to 60 had a defined benefit plan. In 2019, only a quarter did.
How much do people save for retirement?
In 2019, about 50% of households reported any savings in retirement accounts. Twenty-one percent had saved more than $100,000, and 7% had more than $500,000.
These percentages were only somewhat higher for older people. Those ages 51 to 55 were the most likely to have a retirement account. About 60% in this age group had any savings, and 31% had saved more than $100,000.
Households with more than $0 saved for retirement, by age
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Retirement savings accounts are not the only place that people could store money for retirement. Is it possible that people are primarily saving their money elsewhere?
Who has more than $0 in these types of accounts?
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Retirement Savings
e.g. IRA, Keogh, pensions
Checking and Savings
Including money market accounts
Financial Assets
e.g. Liquid assets, stocks, bonds
Most American households have at least $1,000 in checking or savings accounts. But only about 7% have more than $100,000 in checking and savings. About 40 percent of the households nearing retirement age have that amount of financial assets, including checking and savings accounts,retirement accounts, stocks, bonds, and certificates of deposit.
Higher percentages of households have a net worth of at least $100,000, especially as they grow older. Net worth includes non-liquid assets, such as a vehicle or house, that would have to be sold to provide income.
Even including these assets, many Americans appear to be set up to depend heavily on Social Security benefits after they stop working. Workers currently younger than 63 are eligible for full Social Security retirement benefits at 67. The average yearly Social Security benefit is currently about $22,000.
How do your retirement savings compare to others?
Households with higher incomes have more saved no matter what is counted as retirement savings.
How do your savings compare to other households?
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At 30 to 34 years old, median retirement savings was$1.6K.
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The median household between the ages of 30 and 34 had $1,600 in dedicated retirement accounts, $5,000 in checking and savings accounts, $14,000 in financial assets, and a net worth of $29,000. (In the surveys, the age of the household reflects the male’s age in mixed sex couples and the older individual in same-sex couples.)
At ages 55 to 59, the median household had $25,000 in retirement accounts, $5,000 in checking and savings accounts, $40,000 in financial assets, and a net worth of $180,000.
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Sources & Footnotes
Survey of Consumer Finances
Social Security Administration
General Retirement Questions
