Various economic indicators show that large segments of the U.S. population face a significant shortfall in their projected retirement savings. The accumulation of liquid assets earmarked for this purpose is at levels that, according to conventional standards, are insufficient to sustain typical consumption for two decades or more without regular income from wages.
The Survey of Income and Program Participation (SIPP), published by the U.S. Census Bureau, reported that the median savings accumulated in defined contribution plans—primarily 401(k) accounts and similar employer-sponsored schemes—is $955 for salaried workers between the ages of 21 and 64.
The survey included the entire employed workforce within that age range, regardless of whether individuals participate in such plans.
Average Retirement Savings Are Ahead of What’s Required
When the measurement is restricted exclusively to workers with positive savings—that is, balances of at least one dollar—the median rises to $40,000. This contrast highlights the effect of including those without accumulated funds in these specific accounts in the denominator.
Meanwhile, the arithmetic mean of the balance for all workers is $93,000, while for those with a positive balance, the average reaches $179,000.
The discrepancy between the median and the average is due to the presence of savers with high net worth within the sample, which generates a statistical bias characteristic of highly concentrated wealth distributions. In the 55-64 age group, the median savings, considering all employed workers of that age, is $30,000.
Other Average Retirement Savings Projections
Alternative sources present different perspectives by employing broader methodologies. The Federal Reserve’s Survey of Consumer Finances (SCF), as well as reports from asset management firms such as Vanguard (2025) and Fidelity, report higher medians for households with retirement accounts, ranging from $87,000 to $95,000 for the general population.
Furthermore, it’s up to $185,000 for the 55-64 age group participating in workplace retirement plans. The National Institute for Retirement Security (NIRS) deliberately uses a definition that includes non-savers to reflect the broader conditions of the workforce.
Strategies for Strengthening Your Retirement Position
Maximizing the employer’s matching contribution is the most immediate and risk-free measure. Increasing personal contributions to the threshold that triggers the maximum employer match requires no advanced financial skills or exposure to volatility.
Automatic contribution increases, programmed to coincide with salary increases or regularly, facilitate an increased savings rate without any subjective perception of a loss of purchasing power.
Consolidating disparate accounts reduces administrative costs and avoids multiple fees. Account holders who combine their old 401(k) and IRA accounts into a single vehicle gain a comprehensive view of their retirement position, increasing the likelihood of making more efficient contribution and allocation decisions. Even annual increases of 1% or 2% in the contribution rate produce significant effects over longer periods.
Specific Instruments for Age Groups and Portfolio Efficiency
Workers over 50 can make catch-up contributions of $7,500 annually on top of the standard $23,500 limit in 401(k) accounts. Additionally, workers aged 60 to 63 have an extra $3,750 “super catch-up” starting in 2025. For IRAs, the annual limit is $7,000 with an additional $1,000 catch-up.
Strategic Roth conversions allow you to pay lower tax rates during years of temporarily reduced income. Converting assets from traditional IRAs to Roth accounts generates tax-free growth and provisions, reduces your future tax burden, and decreases your exposure to mandatory minimum distributions.
Including private market investments within your 401(k), where the plan allows, can increase annual net returns by approximately 49 basis points, resulting in a 14% higher balance at retirement.
Using annuities as a partial source of retirement income alters the risk-return equation. A combination of guaranteed lifetime income from an annuity—with payments of around 7.1% for life—and portfolio withdrawals according to the 4% rule allows for generating an equivalent income stream with less accumulated capital and greater predictability. The widespread adoption of target-date funds has helped reduce extreme asset allocation behavior.
Newly Created Saving Tools with Expanded Coverage
The 2025 legislation created a new savings vehicle for those under 18, with annual contributions of up to $5,000. Goldman Sachs simulations indicate that a $500 annual contribution from year 1 to year 20, with no further contributions, would generate an approximate balance of $340,000 by age 65, assuming an annual return of 6.5%. This instrument allows for the transfer of savings capacity across generations and advances the start of the capitalization period.
