A recent survey by GOBankingRates sheds light on how much middle-class Americans have saved for retirement. The study, conducted at the end of 2024, asked 1,000 working Americans aged 21 and older about their 401(k) balances and their views on retirement savings.
What Americans Believe About Retirement Savings
The survey found that many Americans think middle-class retirees have saved less than $50,000 by age 65. Among younger respondents (ages 21-34), about 26% believed retirees had less than $50,000 saved. This view was common across other age groups as well, with roughly 25-29% holding the same belief. Only a small percentage thought retirees had saved between $300,000 and $500,000 or more than $1 million.
This wide range of opinions shows uncertainty about how prepared Americans feel for retirement. Experts usually recommend saving 10 to 12 times your annual income for a comfortable retirement, a goal many respondents seem unaware of.
Actual 401(k) Savings by Age Group
The survey also revealed real 401(k) savings amounts, showing big differences between age groups:
Ages 21-34: Nearly 20% have less than $25,000 saved. About 33% have between $50,001 and $100,000. Only 11% have saved over $100,000.
Ages 35-44: Around 17% have $100,001 to $500,000 saved, but 21% still have between $25,001 and $50,000.
Ages 45-54: About 21% have $100,001 to $500,000, while 17% have less than $25,000.
Ages 55-64: Nearly 17% have $100,001 to $500,000, but only 6% have more than $500,000.
Ages 65 and older: Almost 25% have $25,001 to $50,000 saved, 19% have no 401(k), and about 8% have over $500,000.
Younger people are still building savings, but many older Americans have not reached recommended savings levels. Retirement needs vary widely, so personal goals and lifestyles affect how much money is enough.
How to Improve Retirement Savings
Experts suggest several steps to help close the gap between current savings and retirement needs:
Increase contributions gradually: Aim to save at least 15% of your income before taxes. Start small and increase by 1% each year.
Maximize employer matches: Contribute enough to get the full employer match if available—this is free money.
Track your progress: Regularly review your 401(k) balance and adjust contributions as needed.
Seek professional advice: Financial advisors can help create personalized saving strategies.
The Importance of Planning Ahead
Low savings and modest contributions put many retirees at financial risk. While 401(k) balances provide a snapshot, retirees also depend on other sources like IRAs, pensions, annuities, Social Security, and personal savings. A well-rounded retirement plan considers all these factors.
This survey highlights the need for clearer guidance and disciplined saving habits. By setting realistic goals and consistently saving, middle-class Americans can work toward a more secure retirement.
