The Typical American Has Less Than $1,000 Saved for Retirement—Here’s How to Make Sure You’re Contributing Enough

Everyone dreams of their last day of work, when they say “I’m out!” and head off into a blissful retirement filled with lazy days and money in the bank. Well, those dreams are tough to come by right now, and a new report has stark news: The typical worker has less than $1,000 saved for retirement—a number that’s as startling as it is sobering.

So … how is your retirement plan looking? Whether you’re counting down the months until you finally clock out for good or just getting started in your career, you will definitely want to keep reading. We’ll break down the findings of the latest Retirement in America report by the National Institute on Retirement Security, and spoiler alert: Americans are far less prepared than you might realize.

We also talk to Stephen Dissette, an investment advisor representative with Horter Investment Management, to help you understand how much you should have socked away and give you actionable tips for making your retirement plans a reality.

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How much do Americans have saved for retirement?

Are you ready for this? The median retirement savings for Americans, including those who don’t have any retirement savings at all, is just $955. (Quick math refresher: The median is the middle number when all the values in a group—in this case, retirement savings—are lined up from smallest to largest.) Put another way, half of Americans have $955 or less saved, and half of Americans have $955 or more.

If you look at the average savings, that number rises to $93,229. (Refresher No. 2: The average is the sum of all numbers in a group divided by how many numbers there are.) Averages tend to be skewed toward wealthier savers since very large numbers have a disproportionate effect on the total.

Workers who have any amount of money (even $1) in a defined contribution plan, such as a 401(k), do a little better: The median savings for this group is $40,000, and the average savings is $179,082. While that sounds pretty good (and certainly better than $955), that range indicates that many Americans have far less than the $40,000 median—let alone the average.

To gather these numbers, the report looked at data from the U.S. Census Bureau’s Survey of Income and Program Participation (using information collected in December 2022) and mainly included working-age Americans between ages 21 and 64 who are currently employed, as well as some findings on adults who are 65 and older.

How much should you have saved?

Trusted sources like Fidelity suggest that by the typical retirement age of 67, you should have saved roughly 10 times your yearly income. You should ideally start saving when you’re young—by putting away more earlier and earning compound growth over time, you can better ensure that your nest egg can carry you through retirement.

Here’s how much you should have saved by the time you reach the following age milestones:

Age 30: Savings equal to your annual income
Age 40: Three times your annual income
Age 50: Six times your annual income
Age 60: Eight times your annual income
Age 67: Ten times your annual income

Both Fidelity and Vanguard recommend saving a significant percentage of your income each year to help you hit your long-term goals. Fidelity suggests putting away at least 15% percent of your pay annually (including any employer match), while Vanguard advises saving about 12% to 15% each year—again, including employer contributions—to build a solid retirement foundation.

But the National Institute on Retirement Security report finds that people typically contribute only 5% to 6% to their retirement accounts, while the typical employer contribution was just under 3%. Combined, that’s only about half to two-thirds of the lower end of what’s recommended. Over decades of working, that difference compounds into a major gap in your retirement nest egg, and that shortfall grows every year the gap continues.

Why does this matter so much?

According to the report, Social Security accounts for roughly half of the income for a typical older adult—the largest single source of retirement income for most people. Retirement accounts make up just one-fifth of retirement income; other sources are property, investments and income from working.

But because Social Security is meant to be a foundation or safety net, not a replacement for your income, most retirees will also need significant personal savings and investments to maintain their same standard of living once they stop working. If you’re saving well below the recommended rates—like many people are—then you’re likely going to rely much more heavily on Social Security than financial planners advise, which increases the risk of coming up short in your retirement.

What happens if you don’t have enough?

The simple answer, according to Dissette, is that you will need to defer or postpone your retirement. This isn’t always a bad thing, Dissette explains. “There are actually two major advantages to doing this,” he says. “One, it allows you more time to grow your retirement wealth and, two, the longer you defer Social Security, the higher your payout.”

However, if you don’t have a choice but to retire, the only other realistic option is to lower your standard of living—in other words, spend less than you ideally want to. You may need to downsize from a home to an apartment, move to a cheaper state or city or stay on a strict budget.

Medical expenses often increase with age and have been increasing over the years, according to Fidelity, and this can affect your retirement budget. “Someone who does not have lifetime income guarantees—like a pension—can, in fact, run out of money and may be forced to return back to work,” Dissette says.

How can you boost your retirement savings?

It’s never too late to take action on your retirement savings. You can start boosting your nest egg right now with the following strategies that Dissette recommends:

Leverage “auto-escalation”

Most people wait for some mythical “good time” to increase their savings, but that time rarely comes, Dissette says. He suggests auto-escalating your savings instead. “Many employer-sponsored plans, like 401(k)s, allow you to check a box that automatically increases your contribution by 1% or 2% every year,” he says. “The change is small and happens gradually—your ‘take-home’ pay barely feels the hit—but the long-term compounding effect is massive.”

Capture the “super catch-up”

Recent legislative changes in the SECURE 2.0 Act can help those ages 60 to 63 make a “super catch-up” contribution to their retirement plans. “In 2026, the standard 401(k) limit is $24,500,” Dissette says. “However, if you are 60 to 63, that catch-up limit jumps $11,250, allowing you to squirrel away a total of $35,750 per year.” (If you are over 50, you can make a catch-up contribution of an extra $8,000 every year until you turn 60.)

Set up a traditional IRA or a Roth IRA

If you don’t have an employer-sponsored plan like a 401(k) or pension, create your own retirement plan with a traditional IRA or a Roth IRA. Depending on your age and income level, both types of accounts have pros and cons. “I am a big advocate of Roth IRAs, but it depends [on] whether you need a tax break in any given year or you’re willing to defer that for tax-free payout in retirement,” Dissette says. It’s a good idea to talk to a financial advisor to see which one is right for you.

Pay yourself first

Often, people who struggle financially pay their bills first and then try to save what’s left over—and typically, there isn’t much, Dissette says. “When you change your mentality and pay yourself first, you’ll find a way to create enough of a margin to start putting money away for your retirement,” he explains. “Put aside 15% or whatever percent you’re comfortable with, first. It’s not a bill, it’s your own future you’re strengthening.”

To do this successfully, he suggests also writing down a simple and direct spending plan. “Notice I do not use the word ‘budget’—’budget’ for many people is a dirty word,” he explains. “People like to spend, and they need a plan. Without a spending plan, people often end up blowing what they make, spending it on unnecessary items or spending too much on things that they may or may not need.”

Following this advice can help put you on the right path toward a more comfortable retirement. Remember: It’s never too late to start saving.

About the expert

Stephen Dissette is an investment advisor representative with Horter Investment Management. He is a graduate of Northwestern University and served as an officer in the United States Navy. His experience watching his father and grandfather be unable to retire guides his desire to help others protect and grow their retirement accounts, avoid unnecessary taxation and probate, and pass on wealth through risk-based investment opportunities.

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Sources:

Stephen Dissette, investment advisor representative with Horter Investment Management; interviewed, March 2026
National Institute on Retirement Security: “Working Americans Struggling to Prepare for Retirement, New NIRS Report Finds”
Fidelity: “How Much Do I Need to Retire?”
Vanguard: “How Much Do I Need to Retire?”
Social Security Administration: “This Is Not Your Parents’ Retirement: Comparing Retirement Income Across Generations”
Fidelity: “Fidelity Investments Releases 2025 Retiree Health Care Cost Estimate, a Timely Reminder for All Generations to Begin Planning”

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