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A fundamental part of working life in America is saving for retirement. Growing those savings can make all the difference toward securing a comfortable retirement.
The question is, how well are Americans saving for retirement these days?
According to a new report from the National Institute on Retirement Security (NIRS), they are not doing so well (1). The typical American worker has just $955 saved for retirement, when those with no savings are included.
Even among just workers who do have savings, the median balance is only about $40,000, which is far short of what most experts say is needed to retire comfortably (2). It’s also very far from the $1.26 million that the average American thinks is the “magic number” for retirement in 2025, according to a survey conducted by Northwestern Mutual (3).
Those numbers paint a worrying picture.
“This research shows the fragility of both the nation’s retirement infrastructure and retirement preparedness for the typical U.S. household,” said Dan Doonan, executive director of the NIRS, in the report (1).
But are the experts right to worry? And what can you do to catch up if you’re feeling left behind?
Here’s a look at why so many Americans aren’t saving enough for retirement, as well as our five-step plan to help get you back on track for your golden years.
A big takeaway from the NIRS report is that saving for retirement is increasingly being put in competition with other financial pressures.
As workers juggle living costs and competing financial priorities, preparing financially for retirement has become more and more difficult. Americans are forced to balance student loan payments, rising housing costs and everyday living expenses; the list goes on.
“Even among those with savings, balances often are far too low to support a secure retirement,” commented Doonan (1). “Today, too many households are forced to choose between paying their bills and saving for tomorrow.”
In this way, the NIRS report highlights a structural problem in the U.S. retirement system: Millions of workers are struggling to save for retirement on their own.
This forces them to rely on two major mechanisms for securing their finances in retirement: employer-sponsored retirement plans and Social Security benefits.
But these come with problems of their own.
Employer-sponsored retirement plans include both pensions and defined-contribution plans, such as 401(k)s.
While traditional pensions once formed a core part of retirement income, most private-sector workers now rely primarily on defined-contribution plans and personal savings instead (4). Defined-contribution plans are favorable because they offer flexibility, but they also shift responsibility and risk for saving and investing to workers themselves.
“Most retirement programs today rely on workers saving voluntarily, with the tension between saving and the cost of buying a home, daycare and college creating enormous challenges for the middle class,” said Doonan, executive director of the NIRS.
Whether they are pensions or 401(k)s, though, the bigger problem is that millions of Americans lack access to employer-sponsored retirement plans.
This makes it harder to save consistently, as workers without workplace plans are also significantly less likely to save at all — since automatic payroll deductions and employer matching programs often increase participation.
In addition to employer-sponsored plans, many retirees also rely heavily on Social Security income — but the program was never designed to replace a worker’s income in retirement fully.
As of January 2026, the average Social Security retirement benefit is about $2,071 per month, according to the Social Security Administration (SSA) (5). That works out to roughly $24,800 per year.
For some households, that income can stretch a bit further if both spouses receive benefits — the SSA estimates that the average retired couple is getting about $3,208 per month — but even that may fall short of covering basic living costs.
For example, according to data published by the Federal Reserve Bank of St. Louis, the average U.S. household headed by someone aged 65 years or older spends over $60,000 per year, as of 2024 (6). That’s more than double the annual amount coming in from Social Security benefits.
In other words, Social Security was designed to be foundational to, but not a complete, retirement income plan.
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That gap is one reason personal savings and investing are critical. It’s also why many financial gurus, such as Dave Ramsey, recommend a simple but aggressive reset of your finances (7).
However, even if you’re behind on retirement, the situation isn’t hopeless. It’s better to start late than never.
Getting started is simple with a Ramsey-esque financial plan: Eliminate financial obstacles first, particularly high-interest debt, then build consistent saving and investing habits.
Here are five steps you might follow to get your retirement back on track.
First things first: Eliminate the debts that are working against you. For example, credit cards often charge interest rates of 20% or more, far exceeding the returns most investments generate.
Consolidating high-interest debt into a lower-rate loan can help you pay it down faster. Instead of juggling multiple monthly payments, you’ll have one predictable payment to manage each month.
That’s why you might want to consider consolidating all your debts into a personal loan through Credible.
Credible’s online marketplace makes finding the right loan become much simpler by letting you comparison-shop for the lowest interest rates with just a few clicks.
In less than three minutes, you’ll see all the lenders willing to help pay off your credit cards or other debts with a single personal loan.
If you owe a substantial amount, you may also want to see if you qualify for a debt relief program to help clear a significant portion of your debt.
With Freedom Debt Relief, you can speak with a certified debt relief consultant for free, who can show you how much you can save by partnering with them.
If you’re eligible, they can negotiate settlements with your creditors until all of your enrolled debt is resolved.
Unexpected expenses are among the biggest reasons people dip into their retirement savings early.
For this reason, keeping about six months of expenses in savings as an emergency fund is a good way to ensure emergencies don’t derail your long-term plans. And if you want that money to still grow while staying accessible, storing those funds in a high-yield savings account might be a good idea.
A high-yield account like a Wealthfront Cash Account can be a great place to grow your emergency funds, offering both competitive interest rates and easy access to your cash when you need it.
A Wealthfront Cash Account currently offers a base variable APY of 3.30%, and new clients can get a 0.75% boost during their first three months on up to $150,000 for a total APY of 4.05%. That’s more than 10 times the national deposit savings rate, according to the FDIC’s February report.
With no minimum balance or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds are always accessible. Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.
If Americans are struggling to save, it’s often because they don’t know where their money is going.
Budgeting allows you to track spending, identify waste and redirect money toward savings and investments.
If that seems like a good habit to start, Monarch Money’s expense tracking system makes managing your finances easier than ever by seamlessly connecting all your accounts in one place and giving you a clear view of where you’re overspending.
Plus, by linking your credit card accounts, you can even monitor your payment progress in real time and set specific goals to pay off your credit card debt faster.
For a limited time, you can also get 50% off your first year with the code WISE50.
Once spending is under control, the next step is maintaining a lifestyle that leaves room for saving. Avoiding lifestyle inflation, automating your savings and increasing your savings as your income rises are all great, time-tested strategies to help with this new habit.
Another powerful tactic is reducing recurring costs where possible.
According to Forbes, the national average cost for full-coverage car insurance in 2025 was $2,149 per year, or about $179 per month (8).
However, rates can vary widely depending on your state, driving history and vehicle type.
By using [OfficialCarInsurance.com](https://moneywise.com/c/1/416/1817?placement=10), you can easily compare quotes from multiple insurers, such as Progressive, Allstate and GEICO, to ensure you’re getting the best deal.
In just two minutes, you could find rates as low as $29 per month.
Once debt is under control and savings are built, the focus shifts to consistent investing.
Even small contributions can compound dramatically over time.
For example, investing $200 per month at a 7% annual return could grow to roughly $240,000 over 30 years — and to about $525,000 over 40 years.
The beauty of ETF investing is its accessibility — anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time with tools like Acorns, a popular app that automatically invests your spare change.
Signing up for Acorns takes just minutes: Link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio.
With Acorns, you can invest in a dividend ETF with as little as $5 — and if you sign up today, Acorns will add a $20 bonus to help you begin your investment journey. All you need to do is set up a small recurring investment.
Ultimately, the NIRS report highlights how far behind many Americans are — but it also underscores something else: The sooner you start fixing the problem, the more powerful time and compounding can be.
In short, even Americans who are behind on retirement can still improve their outlook.
In fact, just by increasing contributions, investing consistently and controlling expenses, you can dramatically improve your retirement outcome.
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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
National Institute on Retirement Security (1); AOL (2); Northwestern Mutual (3); Investopedia (4); Social Security Administration (5); Federal Reserve Bank of St. Louis (6); Ramsey Solutions (7); Forbes (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
