58 million Americans have no retirement savings: How employers can help | BenefitsPRO (2024)

FAQs

58 million Americans have no retirement savings: How employers can help | BenefitsPRO? ›

58 million Americans have no retirement savings: How employers can help. Auto-enrollment with an opt-out feature is extraordinarily effective, as well as matching HSA contributions, for the 32% of working-age Americans with no retirement account, says a new survey.

Do You? 20% of adults ages 50+ have no retirement savings, 61% worry they won't have enough at retirement, as per new AARP survey. Plus six tips to start saving now.

About 1 in 4 have no retirement savings, according to research released Wednesday by the organization that shows how a graying America is worrying more and more about how to make ends meet even as economists and policymakers say the U.S. economy has all but achieved a soft landing after two years of record inflation.

Anyone with earned income can set up an IRA and start investing for retirement — which is great, because they come with some sweet tax benefits. There are two main IRA types — traditional and Roth — and you can use either or both (although income limits apply with a Roth).

Without savings, it will be difficult to maintain the same lifestyle an individual had in working years. Some retirees make adjustments by: Moving into a smaller home or apartment. Reducing television or streaming services.

Saving is hard. Few jobs offer traditional pensions anymore. A 401(k) puts the burden of financial management largely on the employee. And Social Security is a labyrinth of complex regulations and difficult calculations, administered by a seemingly indifferent bureaucracy.

Recent MarketWatch Guides survey results indicate that 66.2% of Americans feel like they're living paycheck to paycheck. Respondents struggling to make ends meet span demographics, including genders, generations and incomes.

On average, people of color in the U.S. have less money saved for retirement than their White counterparts. More than half of Black and Latinx households have no retirement savings, while only a third of White households lack savings.

What are the average and median retirement savings? The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000. Taken on their own, those numbers aren't incredibly helpful.

Why don't the wealthy have a 401k? ›

The unfortunate truth is that 401(k) plans come with high management fees. This eats into your earnings in the long run. These fees are oftentimes hidden among legal jargon, according to the Rich Dad team. Fees can be but aren't limited to transaction fees, legal fees and bookkeeping fees.

Even if your employer doesn't offer a 401(k) plan, it shouldn't stop you from getting the most out of your retirement savings. You have other tax-advantaged options available to save for the future, including individual retirement accounts, Roth IRAs or health savings accounts — all of which can help your money grow.

Ninety-three percent said they believe that their employees would prefer higher salaries over better retirement benefits, which may be why many put a greater priority on pay and other benefits—such as paid time off and health plans—rather than retirement plans. On average, employers offer three types of benefits.

If you retire with no money, you'll have to consider ways to create income to pay your living expenses. That might include applying for Social Security retirement benefits, getting a reverse mortgage if you own a home, or starting a side hustle or part-time job to generate a steady paycheck.

Older adults with lower incomes have a number of financial options available to help in retirement. Programs such as Medicare, Social Security, food stamps, Medicaid, and Supplemental Security Income (SSI) are available to those who qualify.

For most retirees, Social Security and (to a lesser degree) pensions are the two primary sources of regular income in retirement. You usually can collect these payments early—at age 62 for Social Security and sometimes as early as age 55 with a pension.

27% of U.S. adults have no emergency savings, as of May 2024 polling — the highest percentage since 2020.

Saving for Retirement

Two-thirds of workers (69 percent) in the 2023 Retirement Confidence Survey (RCS) report that they or their spouse have saved any money for retirement. Nearly as many (66 percent) report that they are currently saving for retirement.

A sizable percentage of workers say they have very little or no money in savings and investments. Among RCS workers providing this type of information, 34 percent report that the total value of their savings and investments, excluding the value of their primary home, is less than $25,000 (Figure 3).