If you looked at the typical American worker’s retirement account right now, you probably wouldn’t find much.
The median retirement savings for all working-age Americans is just $955, according to a recent report by the National Institute on Retirement Security (NIRS). The figure includes workers aged 21 to 64, counting those with zero savings.
For anyone assuming that workers can save enough to support themselves after they stop working, this data suggests that for the vast majority, that’s just not the reality.
Even if you isolate the workers who have retirement savings, the median balance for those accounts is just $40,000.
And for all older workers aged 55 to 64, the median balance is only $30,000, which contradicts the narrative that older workers catch up in their final earning years.
The report also highlights an imbalance in how Americans build wealth. For the average worker, home equity makes up roughly 33% of their total assets, while retirement savings account for only about 24%.
With savings levels this low, more retired folks rely on government support. For the typical older adult, Social Security now provides 50% of their total income, according to the NIRS report.
Access determines outcome
The gap between those who have retirement accounts and those who don’t is largely structural. Public sector employees generally have high access to retirement plans and pensions. In contrast, private sector workers — especially those in small businesses — often have no access to a payroll deduction plan at all.
The contribution data supports this. The typical employee contributes 5% to 6% of their pay, while the typical employer puts in just under 3%. This challenges the narrative of the employer-match safety net. A 3% match is not adequate for building a secure future. Most workers would need to make hefty personal contributions that they can’t afford.
Inequality persists across generations
The data also exposes deep fissures along racial and generational lines. Black and Hispanic households own only a fraction of total financial assets compared to white households, a disparity that hasn’t improved much despite a more diverse workforce in younger generations.
Student debt further complicates things. Workers with student loans are more likely to participate in a retirement plan, but their net worth and account balances are significantly lower. The debt service eats away at their ability to leverage compound interest.
What this means for your strategy
The $955 figure is a wake-up call, but it doesn’t have to be your reality. The data suggests that waiting for catch-up years is a flawed strategy.
If you have access to a workplace plan, verify your contribution rate immediately. If you’re relying heavily on home equity, consider how you’ll convert that into spendable cash before you retire.