The Retirement Savings Reality Check: What Americans Actually Have Saved and What They Should Target

Americans are facing a stark disconnect between their retirement savings ambitions and reality. While just over two-thirds of working-age families participate in retirement plans, nearly one-third have no 401(k) at all — often citing inflation pressures and competing financial priorities like emergency funds and high-interest debt as reasons for sitting out.

The gap becomes even more concerning when you examine what people have versus what they expect. A new GOBankingRates survey of 1,000 working Americans ages 21 and older reveals troubling trends across every generation, with specific implications for your 401(k) contribution limit 2025 and beyond.

The Age-By-Age Reality: How Much Americans Are Actually Saving

The data tells a cautionary tale. Among those actively saving, 28% have accumulated between $50,001 and $100,000 — the largest single bracket. But this masks significant variation by age group.

Younger workers (ages 21-34) show the most promise: 65% have saved between $25,000 and $100,000, with 22% already confident they’ll hit the $1 million milestone by retirement. However, 20% of this cohort still have $25,000 or less, and 5% lack a 401(k) entirely.

Mid-career professionals (ages 35-54) present a mixed picture. Among older millennials (35-43), balances are relatively spread out, with roughly 28% in the $50,001-$100,000 range — but troublingly, 10% don’t have a 401(k) at all. Gen X faces similar patterns despite having more time to compound their savings, with 28% also clustered in the $50,001-$100,000 bracket.

Those approaching retirement (ages 55-64) should have clarity on their final numbers, yet 28% still fall in the modest $50,001-$100,000 range, and 8% have no 401(k) whatsoever.

Retirees (65+) represent the most alarming group: 36% have $50,000 or less in their 401(k), 58% have $100,000 or fewer, and only 8% exceed $500,000. Many of this generation rely on pensions or other retirement accounts, but the data suggests many weren’t able to accumulate sufficient savings.

The Million-Dollar Question: Can Americans Retire Rich?

Confidence and reality diverge sharply here. While 22% of Gen Z believes they’ll retire with $1 million or more, only 2% of all Americans currently report having over $1 million in their 401(k) plans.

The skepticism is widespread: 38% of Americans believe it’s “impossible” to retire with $1 million in a 401(k), and the pessimism increases with age. Among those 55-64, nearly half (47%) consider a $1 million retirement portfolio unrealistic. Yet the majority of Americans (51%) believe a typical middle-class person should have less than $150,000 by age 65 — revealing a massive expectation gap.

What Experts Say You Should Actually Have

Financial advisors offer concrete benchmarks that contradict what most Americans have saved:

Steve Sexton, CEO of Sexton Advisory Group, recommends using salary multiples as a rule of thumb:

• Age 30s: 1x your annual salary
• Age 40s: 3x your annual salary
• Age 50s: 6x your annual salary
• Age 60s: 8x your annual salary

This is merely a starting point — you’ll need to factor in inflation, medical expenses, dependents, and other income streams.

Matthew Cleary, CFP at Sentinel Group, takes a more aggressive stance: aim for at least 10 times your pre-retirement income by the time you stop working. He also recommends planning to live on 80% of your pre-retirement income, which most retirement projections suggest is achievable with proper saving and investing discipline.

The disconnect is clear: someone in the $50,001-$100,000 range likely falls well short of these targets.

The Path to $1 Million: It’s More Achievable Than You Think

Here’s where the math becomes encouraging. Cleary emphasizes that a million-dollar portfolio is genuinely achievable for those who start early and remain disciplined.

The math is striking: A 22-year-old planning to retire at 67 who receives an 8% annual return needs to contribute just $2,600 per year to reach $1 million. Someone who delays starting until age 32 would need $5,800 annually to hit the same target — more than double the contribution.

This underscores why understanding your 401(k) contribution limit 2025 and maximizing contributions within those limits matters. Higher limits allow more aggressive catch-up strategies, especially for those 50 and older who can make catch-up contributions.

Cleary’s advice for those nearing retirement is clear: consult a financial planner within 10 years of your target retirement date to review savings, spending rates, and make necessary adjustments.

Key Takeaway: The Time to Act Is Now

The survey reveals that older Gen Xers and younger Boomers should have a clear picture of their retirement readiness by now, yet many remain uncertain. The most common expectation for this group ranges from $100,001-$500,000, with only 9% expecting to exceed $1 million.

For younger workers, the advantage is time itself. The 22% of Gen Z expressing confidence in reaching $1 million-plus retirement savings have the luxury of compound growth on their side — as long as they maintain consistent contributions and don’t let economic downturns derail their strategy.

Whether you’re just starting out or in your final working years, the data suggests the best time to optimize your 401(k) strategy was yesterday. The second-best time is today.

Survey Methodology: GOBankingRates surveyed 1,000 working Americans ages 21+ employed in their current role for at least one full year between November 16-22, 2024. Respondents answered 14 questions covering current 401(k) balances, expected retirement savings, contribution amounts, and confidence levels in reaching millionaire status.