BlackRock Global Head of Retirement Solutions Nick Nefouse announces a new plan to expand retirement investment options at Varney & Co.
A new study finds that the average American worker has saved just $955 for retirement through a defined contribution plan like 401(k) accountmany fall far short of the recommended retirement savings goals for their age.
A study by the National Institute on Retirement Security (NIRS) found that for all workers between the ages of 21 and 64, including those who have not saved anything for retirement, the average amount saved in a defined contribution plan was just $955 as of 2023.
On the contrary, among those who have a positive outlook retirement plan wealth – or at least $ 1 saved in a defined plan (DC) – the average savings was much higher at $ 40,000.
The report found that the average account balance among workers ages 21 to 64, including those with no savings, was $93,229. However, among those who saved at least $1 on the DC plan, the average savings was $179,082.
A woman is talking on her phone while using a laptop in her house. (Getty Images / Getty Images)
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The NIRS study also compared Americans’ retirement savings balance against the target used by Fidelity, which develops guidelines based on age and income levels.
Fidelity recommends that Americans save their annual retirement income by age 30, triple their income by age 40, triple their income by age 50, double their income by age 60 and ten times their income by age 67.
NIRS found that of all the average respondents analyzed in the survey across all age, race, education and gender groups – none have retirement savings or net worth that is more or more than them. age-based savings target.
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The NIRS study showed that most Americans were well behind their age-based savings goals. (Stock)
Across all respondents, the average DC retirement savings amount as a percentage of their savings goals is 4%. When using the total amount instead of DC retirement savings, the average percentage of all respondents the goal of saving by 41%.
Among those with DC retirement savings, the average percentage of all respondents who met the savings goal was 18%.
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The median American across all demographic groups is lagging behind savings goals. (iStock / Stock)
The average amount of retirement savings in DC as a proportion of target savings was 19% for men and 17% for women, while among racial groups, Asian (23%) and White (20%) workers saved more than Black and Hispanic workers (11% each).
The amount saved increases exponentially education standards from 10% of workers whose highest education was high school or less, to 15% of those with associates degrees, 21% with bachelors degrees and 26% of those with masters, doctoral or professional degrees.
Across all age groups, the most successful savers were the younger group of workers between the ages of 21 and 34, with 21% saving as part of that target, followed by 19% of workers between the ages of 55 and 64.
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“As expected, those with some savings are closer to their savings goals than those with no savings. But even for those who have saved, these amounts are much lower if the expectation is that retirement savings in the DC plan will be a significant source of retirement income,” NIRS said.
