A stark new study has exposed a deepening retirement crisis in the United States, revealing that the median savings for American workers stands at a mere $955. The report from the National Institute on Retirement Security (NIRS), a nonpartisan think tank, indicates that most employed adults aged 21 to 64 have alarmingly little set aside for their later years.
Employer Plans Are the Primary Savings Channel
The research underscores a critical divide: workers with access to employer-sponsored retirement plans, such as 401(k)s, have a median balance of approximately $40,000. However, this figure remains drastically short of the $1.5 million many Americans believe they need to retire comfortably. For the estimated 56 million workers without employer plans, the situation is far more dire, as the study found they are likely saving nothing at all.
The Grim Reality of 'Unretirement'
Compounding the issue, a separate report from AARP highlights a growing 'unretirement' trend. Approximately 7 percent of retirees have returned to work within the last six months, with nearly half citing financial insecurity as the primary reason. Carly Roszkowski, AARP's vice president of financial resilience programming, noted that with high living costs and inadequate savings, this pattern of older adults working longer is expected to persist.
The bottom line is stark: if Americans are not saving through their employer, they are probably not saving at all, the NIRS report concludes. This reliance on workplace plans leaves millions vulnerable, especially as Social Security benefits face a potential 20 percent cut by 2034 without congressional intervention.
Rising Senior Poverty and Systemic Challenges
The retirement savings shortfall is contributing to a rise in poverty among older Americans. Data shows that 15 percent of seniors lived in poverty in 2024, up from 14 percent the previous year, making them the age group most affected by financial hardship.
Financial experts often recommend aggressive savings targets, such as having one year's income saved by age 30 and doubling that by 35. However, achieving these goals has become increasingly difficult amid stagnant wages and soaring costs for essentials like groceries and housing.
The NIRS report warns that despite some improvements in the retirement system, major challenges lie ahead, with many workers still excluded from adequate savings mechanisms. This crisis threatens to reshape the financial landscape for future retirees, underscoring the urgent need for broader access to retirement planning and support.
