Americans are not always ready to retire when they reach the age when they want to (and can) stop working: a large part of them are a little behind and, in numerous instances, are far from having enough money to live comfortably during their golden years.
When examining the balances of retirement plans, such as the 401(k)s, one of the most common retirement savings vehicles, the differences are striking. A report from Vanguard, which manages one of the largest portfolios of these plans, provides some insight. Their data comes from participants in their plans.
Another firm, Empower, which offers a financial analysis platform, publishes figures that tend to be higher. The divergence between the two sources is an initial indication of the heterogeneity in the population’s financial situation: how much does the average 60-year-old American have saved by that age?
Retirement Savings: Are You Close to the American Average?
Vanguard’s data, corresponding to participants between 55 and 64 years old, places the median balance in 401(k) accounts at approximately $95,642. The average reported by the same entity for that age group is notably higher, at $271,320.
Meanwhile, data published by Empower for people in their sixties shows a median of $186,902 and an average of $577,454. The gap between medians and averages, and between the figures from one company and the other, is evident.
A broader survey, such as the one conducted by the Federal Reserve in its Report on the Economic Well-being of U.S. Households, encompasses all retirement savings. This study, which includes IRAs, pensions, and other instruments in addition to 401(k)s, estimates that the median savings for households where the primary member is between 55 and 64 years old is approximately $185,000.
This figure is more in line with the medians reported by the administrators of specific plans, confirming that this range represents a more widespread reality than the millionaire averages.
What About Savings in Social Security?
The other fundamental component of the U.S. retirement system is Social Security. Benefits from this program are calculated based on earnings during the highest-earning 35 years of employment.
Unlike accumulated personal savings, Social Security payments are a guaranteed monthly benefit for life. The Social Security Administration (SSA) publishes annual estimates of the amounts workers can expect to receive.
The administration’s calculations for 2026 project that the average monthly benefit for all retired workers will be around $2,071. This amount is not specific to those who retire at age 60, but rather a general average. For those who delay applying for benefits until they reach Full Retirement Age (FRA), the maximum possible benefit amount in 2026 is estimated at $4,152 per month.
Retirements Savings That Experts Recommend Having
A report from Boston College’s Center for Retirement Research has indicated that, even considering all assets, a significant portion of households are at risk of not being able to maintain their pre-retirement standard of living.
This is obviously impacted by increased longevity in the United States and rising healthcare costs, while also being vulnerable to the volatility of financial markets, the arena where retirement savings are at stake.
One guideline proposed by some analysts suggests aiming for total savings of eleven times one’s final salary at retirement. These multiples consider life expectancy, inflation, and the expected return on investments.
Data on spending by consumers over 65 indicate that the average household in that group spends approximately $59,616 per year. Compared to the average annual Social Security benefit of $24,852, this highlights the shortfall that must be covered by personal savings, pensions, or other sources of income.
