The typical American worker has less than $1,000 saved in 401(k)-type accounts, largely because many people don’t have access to workplace retirement plans.
For workers ages 21 to 64, the median amount saved in defined contribution plans like 401(k)s is just $955, according to a new analysis of 2023 Census data by the National Institute on Retirement Security.
If that figure sounds low, it’s because it includes workers with no such savings at all. The analysis found that only 51% of workers had a defined contribution plan through their main employer.
That finding reflects the fact that many employers don’t sponsor such plans, and even when they do, not everyone participates.
The report highlighted sharp disparities in access to employer-provided retirement plans, noting that public-sector workers are more likely to have plan sponsorship — and to participate — than those in the private sector. Hispanic workers and those with lower incomes or less formal education were also significantly less likely to have access or take part.
“Strengthening access to reliable retirement plans is essential if we want Americans to retire with dignity rather than anxiety,” Dan Doonan, NIRS executive director, said in a release.
Even among those with savings, the analysis suggests the typical retirement balance is far too low for a secure future. When counting workers with at least $1 saved in 401(k)s and similar plans, the median jumps to $40,000 — well below the $1.26 million Americans say they need to retire comfortably.
Defined Contribution Plan Retirement Wealth (All Workers)
- Median savings: $955
- Average savings: $93,299
Defined Contribution Plan Retirement Wealth (Workers with a positive balance of at least $1)
- Median savings: $40,000
- Average savings: $179,082
The NIRS report offers a sobering counterpoint at a time when strong stock market gains have helped push the number of 401(k) millionaires to an all-time high. Those headlines can make it seem like retirement savers are broadly thriving, but they often overlook the millions of workers who don’t have access to employer-sponsored plans.
According to The Pew Charitable Trusts, about 56 million workers nationwide don’t get retirement benefits through their jobs.
That’s significant because income from retirement plans is the second-largest source of income for older Americans after Social Security, per the NIRS analysis.
“This research shows the fragility of both the nation’s retirement infrastructure and retirement preparedness for the typical U.S. household,” Doonan said.
