Americans Are Saving More for Retirement Than You Think

When it comes to retirement readiness, don’t buy the narrative that most households are falling behind.

It’s no secret that setting aside money for retirement can be challenging, especially with the rising cost of living. Yet, despite these hurdles, recent research on individual retirement accounts (IRAs) and 401(k)s reveals a positive trend: account balances are at or near record highs. This data suggests that the American long-term saver has successfully built a meaningful nest egg.

Media outlets often highlight that the typical retirement account balance hovers around $20,000, painting a grim picture of the typical retiree’s financial future. But this figure is misleading for several reasons. 

Number one: it includes a wide range of account owners, such as young adults in their 20s with entry-level jobs and understandably small account balances, rather than focusing on those nearing retirement. 

Number two: it fails to account for the fact that many households possess multiple retirement accounts and other assets, such as real estate.

Contrary to what the headlines might suggest, savers approaching retirement age are generally in a much better position. In fact, by the end of 2022, the average 401(k) balance for someone in their 60s with approximately 30 or more years of plan participation exceeded $312,000. This high number shows the importance of participating in your plan and underscores the success of long-term saving efforts.

Even with the ongoing inflationary pressures hurting households and businesses, the trend in retirement savings is encouraging. Recent studies show that 90% of 401(k) participants receive contributions from their employers. Fresh data from two of the largest plan providers show that total savings rates recently hit record highs.

While there is always room for improvement, we have to acknowledge the significant progress being made in Americans’ retirement savings. IRAs and 401(k)s are proving to be effective for most households, providing essential income and resources to prepare for a secure retirement.

Secure Financial Future invites you to join our action network and help continue to pave the way for future generations! We’ve already made big strides this year, and our work is more important than ever.  You’ve worked hard for your retirement. 

Now it’s time to commit to fighting for those just getting started.  Together, let's champion policies that safeguard investments and pave the way for a new era of financial security for the next generation.