Millions lack access to workplace retirement plans
The average American worker has less than $1,000 saved for retirement, highlighting the growing financial vulnerability facing millions of people as they age, according to a new report from the National Institute on Retirement Security.
Median retirement savings for employed adults ages 21 to 64 stand at just $955, a figure that includes workers with 401(k)s and other plans as well as roughly 56 million Americans who do not have access to an employer-sponsored retirement account. The analysis is based on data from the U.S. Census Bureau’s Survey of Income and Program Participation.
Even among workers who do have retirement savings, balances remain modest. The median account holds about $40,000, far below the roughly $1.5 million Americans say they need to retire comfortably.
Rising pressure on older Americans
Low savings levels are contributing to a growing trend of older Americans returning to work after retirement. A recent survey from AARP found that 7% of retirees have gone back to work in the past six months, with nearly half citing financial strain as the main reason.
With living costs remaining elevated, many seniors feel they cannot rely solely on their savings. As a result, working longer or reentering the labor force is becoming more common among retirees.
The financial stress is also reflected in poverty data. The share of seniors living in poverty rose to 15% in 2024, up from 14% the year before, making older Americans the age group with the highest poverty rate.
Workers fall far short of savings benchmarks
Standard retirement benchmarks suggest that workers should have savings equal to one year of income by age 30, double that by age 35, and steadily increase those reserves over time. By age 60, savings should reach roughly eight times annual income.
In reality, workers ages 55 to 64 have accumulated only 19% of their targeted retirement savings in 401(k)s and similar plans, the report found. This shortfall leaves little margin for error as retirement approaches.
Social Security grows more critical
With personal savings so limited, Social Security remains a crucial source of income for retirees. For many seniors, it provides more than half of their annual income, despite common misconceptions about its role.
A 2025 survey found that one in five Americans mistakenly believe Social Security alone will fully cover their retirement needs. In practice, the program typically replaces only about half of pre-retirement income.
Compounding concerns is Social Security’s long-term funding gap. Without congressional action, benefits could be cut by about 20% starting in 2034. Policymakers could address the shortfall by adjusting payroll taxes, raising the retirement age or lifting the cap on earnings subject to Social Security taxes, which is set at $184,500 in 2026.
Looking ahead
While new initiatives aimed at helping younger generations save may improve long-term outcomes, experts warn that millions of current workers remain excluded from the retirement system. Without broader access to workplace savings plans and reforms to Social Security, many Americans risk entering retirement with inadequate financial security.
