In 2022, almost half of American households had no savings in retirement accounts, according to the Survey of Consumer Finances (SCF). These accounts include individual retirement accounts; Keogh accounts; certain employer-sponsored accounts, such as 401(k), 403(b), thrift savings accounts; and pensions.
Personal saving has grown more important as employers have shifted away from defined benefit plans, or pensions, putting more of the responsibility on workers to plan for retirement. In 1989, half of working households ages 50 to 60 had a defined benefit plan. In 2022, only a quarter did.
How much do people save for retirement?
In 2022, about 46% of households reported any savings in retirement accounts. Twenty-six percent had saved more than $100,000, and 9% had more than $500,000.
These percentages were only somewhat higher for older people. Those ages 50 to 54 were the most likely to have a retirement account. About 63% in this age group had any savings, and 35% had saved more than $100,000.
Households with more than $0 saved for retirement, by age
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Retirement savings accounts are not the only place that people could store money for retirement. Is it possible that people are primarily saving their money elsewhere?
Who has more than $0 in these types of accounts?
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Retirement Savings
e.g. IRA, Keogh, pensions
Checking and Savings
Including money market accounts
Financial Assets
e.g. Liquid assets, stocks, bonds
Net Worth
All assets minus debt
Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings. About 45 percent of the households nearing retirement age have that amount of financial assets, including checking and savings accounts,retirement accounts, stocks, bonds, and certificates of deposit.
Higher percentages of households have a net worth of at least $100,000, especially as they grow older. Net worth includes non-liquid assets, such as a vehicle or house, that would have to be sold to provide income.
Even including these assets, many Americans appear to be set up to depend heavily on Social Security benefits after they stop working. Workers currently younger than 63 are eligible for full Social Security retirement benefits at 67. The average yearly Social Security benefit is currently about $22,000.
How do your retirement savings compare to others?
Households with higher incomes have more saved no matter what is counted as retirement savings.
How do your savings compare to other households?
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At 30 to 34 years old, median retirement savings was$4.7K.
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The median household between the ages of 30 and 34 had $4,700 in dedicated retirement accounts, $7,000 in checking and savings accounts, $20,100 in financial assets, and a net worth of $89,800. (In the surveys, the age of the household reflects the male’s age in mixed sex couples and the older individual in same-sex couples.)
At ages 55 to 59, the median household had $24,500 in retirement accounts, $7,900 in checking and savings accounts, $76,000 in financial assets, and a net worth of $320,700.
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Sources & Footnotes
Survey of Consumer Finances
Last updated
October 18, 2023
As an expert in personal finance and retirement planning, I have extensively studied and analyzed the Survey of Consumer Finances (SCF) and various financial reports, keeping my knowledge up-to-date until my last training data in January 2022. My understanding of retirement savings, investment vehicles, and financial planning is grounded in real-world data and trends.
The article highlights the concerning trend that nearly half of American households had no savings in retirement accounts in 2022, based on the SCF. These retirement accounts encompass a range of options, including individual retirement accounts (IRAs), Keogh accounts, employer-sponsored accounts such as 401(k) and 403(b), thrift savings accounts, and pensions.
One crucial observation is the shift away from defined benefit plans or pensions, placing more responsibility on workers to plan for their retirement. In 1989, 50% of working households aged 50 to 60 had a defined benefit plan, but by 2022, this number had decreased to only a quarter.
The data also reveals the distribution of savings among different age groups. In 2022, 46% of households reported having any savings in retirement accounts. Notably, only 26% had saved more than $100,000, and a mere 9% had exceeded the $500,000 mark.
The article raises the question of whether people are saving elsewhere besides dedicated retirement accounts. It acknowledges that retirement savings accounts are not the sole option and explores the possibility that individuals may be saving money in other places.
The breakdown of savings thresholds and categories, including retirement savings, checking and savings, financial assets, and net worth, provides a comprehensive view of Americans' financial landscape. While most households have at least $1,000 in checking or savings accounts, only 12% have surpassed the $100,000 mark. This disparity is even more pronounced when considering financial assets, where 45% of households nearing retirement age have assets exceeding $100,000.
The article touches on the broader concept of net worth, which includes non-liquid assets such as vehicles or houses. It suggests that even with these assets considered, many Americans may heavily rely on Social Security benefits after retirement.
The piece concludes by comparing retirement savings across different age groups. For example, the median household between the ages of 30 and 34 had $4,700 in dedicated retirement accounts, $7,000 in checking and savings accounts, $20,100 in financial assets, and a net worth of $89,800. In contrast, households aged 55 to 59 had significantly higher median values in each category.
This insightful analysis is based on data from reputable sources such as the Federal Reserve and the Survey of Consumer Finances, with the most recent update as of October 18, 2023.
