56% Of Americans Have Less Than $10,000 Saved For Retirement

Is saving for retirement important? Some people think so. But, if you love spending all of your money on things you want right now, like lavish vacations and designer clothing, then maybe learning how to save money for retirement isn’t for you. Just kidding, that’s horrible advice. Your future is very important and you can…

Michelle Schroeder-Gardner

Last Updated: December 1, 2020

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Is saving for retirement important? Some people think so. But, if you love spending all of your money on things you want right now, like lavish vacations and designer clothing, then maybe learning how to save money for retirement isn’t for you.

Why aren't people saving for retirement? How much do you need to retire? Did you know that 56% have less than $10,000 in average retirement savings?Just kidding, that’s horrible advice.

Your future is very important and you can significantly damage it if you are only thinking about the present.

Let me tell you again, saving for retirement is extremely important. If you keep putting it off, it’s only going to get harder, and it’ll most likely add a lot of stress to your life.

Even though prioritizing your future is important, the average person is behind when it comes to saving for retirement.

Saving for retirement now is important for many reasons, such as:

  • It can help make sure you aren’t working for the rest of your life.
  • You can retire sooner rather than later.
  • You can lead a good life well after you finish working.
  • Compound interest means the earlier you save the more you earn.
  • You won’t have to rely on your children or others in order to survive.

As you can see, saving for retirement is very important.

However, according to a survey done by GoBankingRates, 56% of Americans have less than an average of $10,000 in retirement savings and 33% have no retirement savings at all.

This is a very scary statistic, and the image below illustrates is further.



Why aren't people saving for retirement? How much do you need to retire? Did you know that 56% have less than $10,000 in average retirement savings?

Other interesting statistics found in this survey include:

  • 42% of millennials have not begun saving for retirement.
  • 52% of Gen Xers have less than $10,000 in retirement savings.
  • About 30% of respondents age 55 and over have no retirement savings.
  • 26% report retirement savings with balances under $50,000, an insufficient amount for people nearing retirement age.
  • Nearly 75% of Americans over 40 are behind on saving for retirement.

These statistics terrify me.

And, it isn’t just young people without retirement savings, because as you can see around 30% of respondents age 55 and over have no retirement savings.

That is a lot of people who are close to or at retirement age with very little retirement savings!

So, why is this?

Why aren’t people saving for retirement?


They’re trusting ridiculous articles about not saving for retirement.

Sadly, there are many articles that say it’s okay to not save when you’re young.

However, you should never listen to a person telling you not to save money for retirement. Or perhaps, people are just agreeing with these ridiculous articles because it makes them feel better about how they aren’t saving for retirement?

Whatever the reason may be, everyone needs to face their fears and build their retirement savings.

I have read countless articles, such as If You Have Savings In Your 20s, You’re Doing Something Wrong, that tell people not to save money. I’ve even had people tell me that I’m not living the way I should because I’m saving for retirement.

I really hope no one is listening to this kind of advice, because there are so many reasons to start saving for retirement as early as you can. I don’t think I’ve ever heard someone say “I regret all that money I saved when I was younger.”

In fact, it’s usually the exact opposite.

You should start saving as much money as you can, as soon as you can, because it’ll help you be better prepared for the future.


Many people believe that 5% is enough to save.

There are a lot of people that think saving between 1% and 5% of their income is enough in order to be on track for retirement.

Sadly, that most likely won’t be enough to retire.

Instead, you should watch your spending now and/or find ways to make more money, so that you can start saving for retirement.

By spending less money, you’ll decrease the amount of money you need for the future, including money for emergency funds, retirement, and more.

Just think about it: If you are currently living a frugal lifestyle, then you will be used to living on less in the future. This means that your retirement savings doesn’t need to be as large, which means it may be easier to reach that savings goal.

According to the U.S. Bureau of Economic Analysis, the personal savings rate has averaged around 5% in the past year, and averaged 8.33% from 1959 until 2016.

While 5% is better than nothing, even just one small emergency each year could easily and completely wipe out that savings.

Further, saving just 5% means it will take you a very long time to retire. Mr. Money Mustache has a great graphic in his blog post The Shockingly Simple Math Behind Early Retirement that shows you how your savings rate can dramatically impact when you’ll retire. For example:

  • With just a 5% savings rate, it would take you 66 working years until you reached retirement.
  • A 25% savings rate means that it would take you 32 working years to retire.
  • A 50% savings rate means that it would take you 17 working years to retire.
  • A 75% savings rate means that it would take you 7 working years to retire.

So, by saving more of your money, you are likely to retire sooner. Sounds amazing, right?

Related: Do You Know Your Net Worth?


A lot of people don’t understand compound interest.

Saving for retirement as soon as you can is a great thing, especially because of the power of compound interest.

With compound interest, time is on your side- meaning you should start saving money as early as you can.

Compound interest is when your interest is earning interest. This can turn the amount of money you have saved into a much larger amount years later.

This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest through your retirement account, then you can actually turn your $100 into something more. When you invest, your money is working for you and growing your savings.

For example: If you put $1,000 into a retirement account with an annual 8% return, 40 years later you will have $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would grow into $3,015,055.

Side note: I recommend you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is similar to Mint.com, but much better. Personal Capital is free and it allows you to aggregate your financial accounts so that you can easily see your whole financial situation, including investments.


Some think it’s normal to not have retirement savings.

Many people normalize their debt or low savings rate (or even lack thereof) because they assume others aren’t doing so well either.

Well, why would you want to be normal, especially when it comes to saving money?

You should always strive to do your best as sometimes “average” is not good enough for you to live a financially successful life. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.

Just because the average person has a low average savings amount doesn’t mean that you have to be in that same financial situation. Instead, you should be in control of your own life!

If you want to be even better than the average, I highly recommend reading The Average Net Worth For The Above Average Person on the Financial Samurai website. It is an excellent article that can motivate you to improve your finances.

According to Financial Samurai, the average net worth of the above average person is:

Why aren't people saving for retirement? How much do you need to retire? Did you know that 56% have less than $10,000 in average retirement savings?

Remember, striving to be above average means you can take control of your financial situation, retire on time or even early, and live a happier life.


People think that saving for retirement means you won’t have fun.

As you all know, I really dislike the myth that people who save money are boring. That’s not true at all.

I believe that you can find a balance while living a good life and saving a comfortable amount of money.

There are plenty of ways to live an awesome life while saving money and budgeting realistically. Yes, you can still see your friends, have fun with your loved ones, go on vacations, and more.

Here’s a list of some early retirees who are leading great lives. I definitely recommend reading about them:

If you want to learn how to save for retirement, then learning how to be happy with yourself and figuring out affordable ways to enjoy life are key.

Related article: How To Have Frugal Fun


Women are 27% more likely than men to have no retirement savings. Why aren't people saving for retirement? How much do you need to retire? Did you know that 56% have less than $10,000 in average retirement savings?

Women are 27% more likely than men to have no retirement savings.

In fact, 63% of women say they have less than $10,000 saved for retirement to NO savings for retirement at all, which compares to 52% of men in the same situation.

To change this money statistic, please read The Smart Woman’s Guide To Investing Success. Here’s a quick snippet from that blog post:

“Women face different obstacles than men do when it comes to investing in the stock market. Right off the bat, they tend to have less in savings because women often take time off to raise children. With years of not earning a salary, there is no money being saved and compounded upon.

In addition to this, women typically outlive men by close to 10 years on average. Therefore, it is important as a woman to invest in the stock market.”


Some people think they don’t need to save yet.

Instead of thinking that you’re invincible and that you have all the time in the world to improve your finances, you should stop procrastinating and learn how to build your wealth now.

Many people push things off and/or spend their money carelessly because they think they can start tomorrow, next month, and so on. However, for everyday that you push off saving for retirement, the further away and harder you’ll have to work towards your goal.

Stop wasting time and take control of your financial situation now.

Read Why Saving Money In Your 20s Is A Good Idea to learn more.


Many think their income will never end.

Yes, there are many different types of jobs and your income potential is pretty much unlimited. However, you never know how long you’ll be making money, whether you’ll come across medical issues, or how long your job will last.

You might be thinking “But I enjoy my job!”

While it’s great to love your job, you should still be saving for retirement. I have heard far too many people say they don’t need to build their retirement savings account because they love their job enough to just work forever and still be happy.

However, what happens when you can no longer work? You don’t know what the future will bring.  You may encounter a medical problem, a serious life event, you may hate your job 20 years from now, and so on.

Remember, nothing is guaranteed.

So, instead of spending every last penny, you should find ways to start saving for retirement.


What you need to do to jump start saving for retirement.

The sooner you start saving, the sooner it will become a habit. By saving for retirement now, you will learn good retirement savings practices that will help you well into the future.

I always say that the first step to investing is to just jump in. However, what if you don’t even know how to start investing and saving for retirement?

If you are like many who don’t know how to begin, here are the easy steps to start saving for retirement:

  1. Start saving your money. In order to invest your money, you need to start setting aside money specifically for it. The amount of money you save for investing is entirely up to you, but in general, the more the better.
  2. Do your research. Before you start dumping your money into the stock market and other investments, it’s a good idea to know what you’re putting your money towards. Researching various investment-related tips will help you become more informed about your investing decisions, which only means you will make better decisions well into the future.
  3. Find an online brokerage or someone to manage your investments. There are two main ways to invest your money- yourself through a brokerage or you can find someone to manage your investment portfolio for you. You will need to chose one of these options to actually start investing your money. Personally, I like to do everything myself through Vanguard.
  4. Decide how you will invest. How you invest depends on your risk tolerance, the time period for which you are investing (when will you retire?), and more. Generally, the sooner you need your funds the less risk you will take on, whereas the longer your time period is, then the more risk you may be willing to take.
  5. Track your investment portfolio. This is important because you may eventually have to change what you are invested in, put more money towards your investments, and so on.
  6. Continue the steps above over and over again. To invest for years and years to come, you will want to continue the steps above over and over again. Now that you know the steps it takes to invest your money, it only gets easier.

As you can see, saving for retirement isn’t impossible. By starting now, you’ll set yourself up for a much better future.

Have you started saving for retirement? Why or why not?

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Mustard Seed Money

    I saw this figure the other day and it shocked me!!! I don’t know if people over estimate how much they are going to receive in social security but I have a feeling there are going to be a ton of people that have to work much longer than they anticipated. In some ways I wish the government would force employers to withhold higher 401k contributions so that people understand how much they really need.

    1. Yeah, it’s crazy how little people save!

  2. Go Finance Yourself!

    Those really are some scary numbers. I’m also amazed by the bad advice I read in financial magazines. Most talk about your 20s is when you live it up. They recommend getting to $1,000 saved in your emergency fund as the goal for your 20s. Really? Saving $1,000 is a goal? Then they say your 30s is when you really get focused on saving for retirement.

    Unfortunately, many people just don’t have much financial education, despite an infinite amount of resources now available to anyone with a computer and internet access. We really need to make personal finance mandatory in school and start preparing people for real life.

    1. Right?! There is so much bad financial advice out there.

  3. Michelle, are you sure that Elite Daily article wasn’t originally posted to The Onion? Lol. That’s hilarious and sad. Until you look at the author’s byline at the bottom of the article. I won’t repost it here because it’s a little graphic, but the article makes much more sense when you consider the source.

    The problem is the concept of delayed gratification in our current society continues to be lost. It’s pretty pathetic. So many people want it “now” and it only compounds the problem with social media and quick buys on Amazon. 1-Click Purchase anyone? These sites and methods aren’t bad in and of themselves, but they make it easier (frankly) for people to be stupid. The rich and richer because the dumb get dumber.

    Here’s a big takeaway from you post, Michelle:

    – A 50% savings rate means that it would take you 17 working years to retire.
    – A 75% savings rate means that it would take you 7 working years to retire.

    The math is simple, but most are too dense to understand it. Then again, they probably skipped that class to have fun in the moment. Sorry if I’m a little harsh here this morning, but stupidity is a pet peeve of mine! Fortunately, I’m among like-minded people here 🙂

    Great article. Really got me thinking! Thanks for posting.

    1. Sadly, many people think this. When I was younger, I was often told the same!

  4. Rachel Slifka

    Wow, that is eye opening. It seems like the common thoughts among many millennials is that you can use whatever is left over at the end of the month for retirement. It is the last expense they think of, when it should really be the first. Who wants to be working forever?!

  5. To combat the idea that low expenses=a boring life is a big part of the reason we publish our monthly expenses. It gives people an idea of what life looks like without the 9-5 and all the things that become possible even with low spending.

    Compound interest is crazy to me as well! I remember when I was working seeing our investment growth at $10,000 a year or $15,000 a year and thinking that was half of what I was earning at my job! Even if I didn’t contribute anymore to our investments, we were still “saving” more than most of my coworkers. Investing early means the $’s we add are so much smaller. I would rather add less money early on, than try to bust our butts at 40, 50 or 60 years old.

  6. Saila

    Almost every savings account I found has less than 1% interest.
    Where can I find accounts that would give me 8% interest annually?

  7. Hey Michelle!

    These statistics are so scary but im not surprised at all. It takes a light bulb moment to really understand the impact of not saving for retirement will do to your future and most people just wont ever get that moment until they are a lot older.

    I think part of the problem is just the fact that they dont teach personal finance in public schools. Economy in general is one thing but there needs to be education on personal finance taught early and through out a persons growth and educational stages.

    1. Yes, I definitely think that it needs to be taught in school.

  8. Cody @ Dollar Habits

    As always, great article, Michelle. Those numbers are really something!

    I’m very thankful to have read material (blogs and books) at a relatively young age recommending to start saving for retirement as early as possible to take full advantage of compound interest. When it comes to saving and investing for retirement, time truly is your friend. Not so much when it comes to health and beauty. We got started saving for retirement around age 22. I hope to help spread the “start early” message as best I can.

    1. Yes, time is definitely your friend.

  9. We’ve saved for retirement very sporadically through our 20s. My husband and I have both had multiple different jobs, career changes, and he went back to school for a while, so it’s been hard to get much traction. At his current job, he has to wait a year before he can contribute to a 401K. We’ve supplemented here and there with an IRA. We’re going to work hard at saving a lot more for retirement after we knock out a small car loan this year.

  10. Financial Panther

    The thinking that your income will never end is definitely a mistake that a ton of people make. A lot of people start their first job and just assume that their income can only go up every year. The thing is, it’s not something that you can just assume. There are so many things that can happen that it really pays to learn to live on less and give yourself that cushion. I know for myself, I ended up taking a $50,000 pay cut in 2016. Still, because I’d been so used to saving and living on less, I didn’t even notice the change in my salary. If you get dependent on that salary, a lot of problems can happen.

    1. Yes, for sure! I have seen way too many people make that mistake.

  11. Dave

    Your blog is great. Having less than $10k is a scary stat. I feel blessed.

  12. Some of these numbers are mind blowing. It’s actually really scary.

    Loved the point you made about living frugally now so you are used to it down the road. We love living frugal and free! It’s really a lifestyle change.

    Compound interest is an absolutely amazing thing. No sense in having your money in a savings account, it’s actually losing money due to inflation.

    Great article! I’m sure this should be a wake-up call for a lot of people. And for people who have started a retirement fund it’s more motivation =)

  13. The statistic of 42% of millennials not saving for retirement is sad but isn’t surprising. So many people I talk to act like either everything will magically fall into place or that they have some far off relative that will pass away and leave them an inheritance.

    I usually point people towards robo-advisors like Betterment and Wealthfront. They make investing so simple for people who really don’t want to think about it but know they should be doing it. All you gotta do is deposit money in regularly and they do all the work for you for only a 0.25% fee.

    1. Yes, there are many companies that make it so easy for people to invest. I wish more people realized that.

  14. ReachingTheCrest

    I think so many people believe they will have time to save later. Or somehow someone will save them. They will one day get the harsh reality that no one will be there to save them. The thing that frustrates me the most are people who are lucky enough to have good careers and make a solid income but still choose to not save. I see some of these folks around me at work. Well into their 60s and still working. Not by choice.

    Learning that saving isn’t optional. Learning that every little consumer good isn’t your right to have, and simply learning to live on less are all qualities that need to be lived by.

    Great post. I really like your graphics. I have Graphic Envy!

  15. These stats are crazy Michelle! I’m not really surprised with how I see a lot of millennials and other people spending money. Personally, I am not perfect. Being a foodie and living a foodie city, Denver, makes it very tough.

    As usual, fantastic post Michelle! There is some great advice in here!


  16. We’re All Poor Here

    There were only 1,500 people per age group in those surveys. I’m sure the real figures are even worse.

    There are almost 50 million food insecure people in the US. When the question is “Am I going to eat today?”, the question “How much should I put into a Vanguard account this month?” is probably just not going to exist.

  17. There are many financial problems in everyone’s life. However saving Money For retirement is a good investment.

    Keith Pound

  18. “Many think their income will never end.”

    Tell that to every person whos ever been laid off. Ouch.

  19. I think it’s scary how little people have saved for retirement. I can’t believe some actually give the advice of not saving in your 20s. I started saving as soon as I started working after college. At the time it wasn’t much but any little bit is better than nothing. More people need to be education on money and finances while they are young so they can fully understand the impact of not creating a savings.

    1. Saving now is always better than later! 🙂

  20. Wow – scary statistics here, Michelle!! It stuns me that nearly 40% of women have no retirement savings. It is so easy to think that retirement is far away, and then the next thing you know, you’re there, and with little or no money!

    1. Right?! I really hope these statistics change one day for the better.

  21. Megan

    Hi Michelle!

    I have been wanting to start a Roth IRA for myself – do you have any recommendations for the best places to start one?

    Thank you so much!

  22. I haven’t saved as much as I’d like to for my retirement, but seeing these stats I realize I’m in a much better place than I thought.

    Overall I think there is a great lack of education around the need for retirement savings. When I talk to other people my age about saving for retirement it seems that the reason they aren’t saving is they don’t know where to start or where to go for help. The thought of retirement savings overwhelms them so they put it off.

    Leah | A Relaxed Gal

  23. Hi Michelle, I am quite surprised with these stats. I am even more shocked to know that 33% of Americans have no retirement savings at all. Saving for retirement is important for everyone. It helps one to take control of their financial situations, live happily and can even retire early if the savings are good. I am going to share this on all my social channels to create awareness about the importance of savings. Thanks for raising such an important point related to everyone’s life.

  24. I honestly can’t say that I’m surprised. If many people don’t have enough money to cover a $1000 emergency, then they definitely wouldn’t have $10,000 saved for retirement. A lot of people’s priorities are in the wrong places.Hopefully, they will wake up soon.

  25. Beth @ The Money Pixie

    Great topic. I know my folks were in exactly this position – no money for retirement. Things worked out for them, but they certainly could have been better. It’s why I work so hard not to find myself in the same position.

    My motto – save early and save often!

  26. I’m not saving as much as I’d like for retirement right now, though I do have a plan to improve that in 2020. I have worked to save enough of my income to be secure in my retirement, but I am also earning extra money to use for fun.

  27. Josh

    I didn’t realize the stats were this bad but it makes sense with such a low long-term national savings rate.

    I’ve been on both sides of the fence (financially). Living paycheck to paycheck and happy to even make the 10% match & having disposable income and able to contribute 20% of my paycheck.

    Since it’s so far down the road, extra retirement contributions is one thing I cut back on in my 20s to focus on getting out of debt. Now I’m trying to catchup in my 30s.

  28. Travis

    I totally believe 56% of Americans have less than $10k saved for retirement because I saw it first hand as a financial advisor in the banking industry.

    Once, I had a young couple and the wife had saved $15k in her retirement account. She just left her job and wanted to take the cash to purchase furniture.

    I told her to Shut the Front Door.

    Even after explaining to her she would pay a 10% early withdraw penalty, at least 20% in taxes, and miss out on compounding interest (almost $100,000 assuming a 7% annual return over 30 years).

    This is just one example I saw from many people who sabotaged their future retirement.

  29. Ada

    How do you reconcile an early retirement savings plan with paying off current debt asap taking into account compound interest? What proportion of income should be allocated to debt vs retirement?


  30. Oh god, last week I was walking my dog and this nice neighbor lady came over to pet her. She must have been 70? And I asked her if she had a dog and she said no she can’t because she still has to work to pay for her mortgage. I tried to hide my suprise because she was literally at least 70 years old and she’s still employed?!

    Lovely woman but I was soooo curious (and a bit sad) as to why someone her age still had to work!!!