The median American worker has $955 saved for retirement

New report reveals a stark savings gap

The typical working American has just $955 saved for retirement.

That number comes from a February 2026 report by the National Institute on Retirement Security (NIRS), which looked at all workers aged 21 to 64, including those who have saved nothing at all.

The data comes from the U.S. Census Bureau’s Survey of Income and Program Participation, with December 2022 as the reference month.

Among workers who do have money in a retirement plan, the median balance jumps to $40,000.

Near-retirees face a bigger problem

Workers closest to retirement aren’t in much better shape. Among those aged 55 to 64, the median amount saved is just $30,000.

Fidelity’s widely used guidelines suggest saving six times your salary by 50, eight times by 60, and 10 times by 67.

NIRS found that across every age, race, education, and gender group, zero percent of median workers hit their age-based savings target. Not one group came close.

Half of workers lack a workplace plan

About 56 million private-sector workers don’t have access to a retirement plan through their job, according to a 2025 analysis by the Pew Charitable Trusts.

That matters because people are far more likely to save when a plan comes with automatic payroll deductions and employer matching.

Workers without a workplace plan are 15 to 20 times less likely to save in any tax-advantaged retirement account. Among those who do have savings, 80% built their balance through an employer plan.

The $955 figure needs some context

That $955 median includes everyone, from 21-year-olds just starting out to people with nothing saved at all.

Among those who have actually put money away, the median is $40,000, and the average across all workers is about $93,000, though high earners pull that number up.

Andrew Biggs of the American Enterprise Institute has pointed out that broader measures, including home equity and other assets, paint a less alarming picture. The underlying data also predates a strong market run.

Social Security carries most of the weight

Social Security provides roughly half of income for the typical older American. For about one in four seniors, it covers at least 90% of what they live on.

In 2024, the program kept about 28.7 million people above the poverty line, according to Census Bureau data.

But the program’s combined trust funds face projected depletion by 2034, according to the Social Security Trustees’ 2025 report. After that point, incoming payroll taxes would cover only about 81% of scheduled benefits.

Depletion would cut benefits automatically

If Congress doesn’t act before 2034, every beneficiary would see payments shrink regardless of age, income, or need.

The average monthly benefit as of January 2025 was about $1,976, and a 19% cut would reduce that by roughly $376 a month. The funding gap keeps growing as more people retire and fewer workers pay in.

The Social Security Fairness Act, signed into law in January 2025, expanded benefits for some public-sector retirees but also moved the insolvency date closer.

The American Action Forum estimates that fixing the program today would take either a 29% payroll tax increase or a 22% across-the-board benefit cut.

Poverty among older Americans keeps rising

The Supplemental Poverty Measure rate for Americans 65 and older hit 15% in 2024, up from about 14% the year before, according to Census Bureau data.

That measure accounts for medical expenses, taxes, and government benefits, making it a more complete picture than the official poverty rate, which stood at about 10%.

Women, Black, and Hispanic older adults face significantly higher rates of poverty in their senior years.

Rising housing costs, health care expenses, and the loss of traditional pensions have all pushed more seniors into financial trouble.

Trump proposed a new retirement account

During his Feb. 24, 2026, State of the Union address, President Donald Trump announced plans for a new retirement account aimed at workers without employer-matched plans.

The account would follow the model of the federal Thrift Savings Plan, with the government matching worker contributions up to $1,000 a year.

The proposal builds on the Saver’s Match program created under the SECURE 2.0 Act of 2022, set to launch in 2027.

Details remain limited, and it’s unclear whether the plan needs new legislation or could move through executive action.

Twenty states already started their own programs

Twenty states have passed laws creating automatic IRA programs for workers whose employers don’t offer retirement plans.

Fifteen of those programs are up and running, with nearly 1.2 million workers enrolled as of January 2026.

The setup is simple: eligible workers get enrolled automatically, and a preset savings rate, usually 3% to 5% of earnings, comes out of each paycheck.

Workers can opt out, but research shows most stay in once they’re enrolled. The programs target small businesses that don’t offer their own plans.

Workers still have options on their own

Workers without an employer plan can open an individual retirement account, either traditional or Roth, on their own. In 2026, the IRA contribution limit is $7,000, with an extra $1,000 for those 50 and older.

For workers with a 401(k), the contribution limit is $24,500, with catch-up amounts of $8,000 for those aged 50 to 59 and 64 and older, and $11,250 for those 60 to 63.

Low- and moderate-income workers may also qualify for the Saver’s Credit, a tax break worth up to $1,000 per person.

The payroll tax cap sparks debate

In 2026, only the first $184,500 of earnings faces Social Security payroll taxes. Once a worker earns past that amount, they stop paying into the program for the rest of the year.

Some lawmakers and policy groups want to raise or eliminate that cap to bring more money into the system. Lifting it entirely would cover a large share of Social Security’s projected shortfall.

Opponents say it would amount to a big tax increase on upper-middle-class workers and small business owners.

The system leaves millions behind

The retirement savings gap comes down to a system built around employer-sponsored plans that millions of workers simply don’t have.

For those without a workplace plan, the NIRS report found they’re almost certainly not saving at all.

Social Security was designed as a foundation, not a full replacement for a paycheck, yet many retirees lean on it as their main source of income.

Whether through federal proposals, state programs, or individual action, closing the gap means reaching the workers the current system misses.

This article was created with AI assistance and human editing.

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