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The average retirement savings account is smaller than you think

If you’re approaching retirement, here’s how to get ahead

Updated:

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By:
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Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.
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Photo by Sven Mieke on Unsplash

Key Insights

  • The typical American retires with far less savings than financial experts recommend.
  • Rising living costs, longer life expectancies, and market uncertainty are straining retirement plans.
  • Experts say even late-career workers can still take meaningful steps to boost their nest eggs.

As millions of Americans approach retirement, new data underscore a sobering reality: many are entering their post-work years with limited savings, raising concerns about long-term financial security.

Surveys from major financial firms and research organizations consistently show that the average American has saved between $200,000 and $300,000 by the time they retire. Median figures — which better reflect typical households — are often far lower, frequently under $100,000. 

By contrast, many retirement planners estimate that retirees may need $1 million or more to maintain a comfortable lifestyle, depending on health, location, and longevity.

The gap between what Americans have saved and what they may need is driven by several factors. Wages have not kept pace with housing, healthcare, and education costs, making it harder for workers to save consistently. 

At the same time, fewer employers offer traditional pensions, shifting more responsibility to individuals through 401(k)s and IRAs. Market volatility and inflation have also eroded confidence and purchasing power in recent years.

Despite these challenges, financial experts stress that future retirees are not powerless — even those who feel behind.

Steps future retirees can take now

One of the most effective strategies is to increase retirement contributions, especially later in a career. Workers aged 50 and older are eligible for “catch-up” contributions that allow them to put additional money into 401(k)s and IRAs beyond standard limits. Even modest increases, compounded over several years, can significantly improve retirement balances.

Another key move is to delay claiming Social Security when possible. While benefits can be claimed as early as age 62, waiting until full retirement age — or even until age 70 — can permanently increase monthly payments, providing a more reliable income stream for life.

Reducing high-interest debt before retirement is also critical. Entering retirement with credit card balances or large loan payments can quickly drain savings. 

Financial planners often recommend prioritizing debt payoff alongside retirement saving in the final working years.

Finally, experts emphasize the importance of professional guidance. A certified financial planner can help workers set realistic goals, adjust investment risk, and plan for healthcare costs — one of the largest and most unpredictable expenses in retirement.