A stark new report has exposed a deepening retirement crisis in the United States, revealing that the median savings for American workers stands at a mere $955. The study from the National Institute on Retirement Security (NIRS), a nonpartisan think tank, analyzed data from employed adults aged 21 to 64, including those with and without access to employer-sponsored plans.
The Alarming State of Retirement Preparedness
The findings paint a troubling picture of financial insecurity for millions. While workers with retirement savings plans, such as 401(k)s, have a median balance of approximately $40,000, this figure falls drastically short of the $1.5 million many Americans believe they need to retire comfortably. The report underscores a critical divide: most workers who are not saving through their employers are not saving at all.
A System Leaving Many Behind
The study highlights that approximately 56 million workers lack access to employer-sponsored retirement plans, leaving them particularly vulnerable. "While there have been some noticeable improvements in the retirement savings system in recent years, many workers are still left out of that system, and major challenges lie ahead," the NIRS report warns. This exclusion is compounded by the looming threat to Social Security benefits, which may be cut by 20 percent in 2034 without congressional intervention.
The Rise of 'Unretirement' and Senior Poverty
Concurrent data from AARP reveals a growing trend of "unretirement," where seniors are forced back into the workforce due to financial strain. Approximately 7 percent of retirees have returned to work in the last six months, with nearly half citing concerns over financial security as their primary motivation.
Carly Roszkowski, AARP's vice president of financial resilience programming, stated to CBS News, "With the cost of living still high and many people worried that they don't have enough saved for retirement, the trend of older adults working longer will likely continue."
Poverty Rates Climbing Among Seniors
The financial distress is reflected in rising poverty rates. The NIRS report found that 15 percent of American seniors were living in poverty in 2024, up from 14 percent the previous year. Seniors now represent the age group with the highest poverty rate, a direct consequence of inadequate retirement savings.
The Challenge of Saving in Today's Economy
Financial experts often recommend aggressive savings targets, such as having a year's income saved by age 30 and doubling that by age 35. However, achieving these goals has become increasingly difficult for many Americans. Stagnant wages and soaring costs for essentials like groceries and rent have eroded disposable income, particularly for those raising families.
The report concludes with a sobering assessment: "The bottom line is that if Americans are not saving for retirement through their employer, then they are probably not saving at all." This reality signals a pressing need for systemic changes to address the widening retirement savings gap and prevent further financial hardship among aging populations.
