The typical working household has virtually no retirement savings, according to a study by the nonprofit National Institute on Retirement Security. When all households are included—not just those with retirement accounts—median retirement savings added up to just $2,500.
The median retirement account balance was $3,000.
For near-retirement households, the new analysis finds that the median retirement account balance is $14,500. Also, some 62% of working households age 55-64 have retirement savings less than one times their annual income, which is far below what Americans need to be self-sufficient in retirement.
A separate study by the Aon Hewitt consulting firm found that employees need to have amassed savings equal to 11 times their annual pay to retire comfortably at age 67.
The NIRS study found that retirement account ownership rates are closely correlated with income and wealth.
Nearly 40 million working-age households (45%) do not own any retirement account assets, whether in an employer-sponsored 401(k) type plan or an IRA. Half of households with no retirement savings are headed by someone between age 45 and 65, and may have too few years to catch up.
Households that do own retirement accounts have more than 2.4 times the annual income of households that do not own a retirement account.
Median retirement account balances
Source: National Institute on Retirement Security 2015 Continuing Retirement Savings Crisis report