58% of Americans aged 65 and older have only $100,000 or less in their 401(k)s

According to the latest Federal Reserve data, just over two-thirds of working-age families participate in retirement plans. For the nearly one-third of Americans not saving in a 401(k) or similar retirement account, several factors may be at play. Rising inflation could make it difficult to allocate funds for savings, and any remaining money might be directed toward urgent financial needs, like building an emergency fund or paying off high-interest credit card debt.

Among those saving in a 401(k), the largest group of Americans (28%) has a balance between $50,001 and $100,000, as revealed by a recent GOBankingRates survey. This survey, which included 1,000 working Americans aged 21 and older who have been employed for at least one year, examined 401(k) balances and saving behaviors. Interestingly, 401(k) balances did not vary as significantly by age as one might assume.

Here’s a breakdown of key findings regarding Americans’ retirement savings:

• Low balances among older adults: 36% of individuals aged 65 and older report having $50,000 or less in their 401(k) accounts.
• Perceptions of middle-class savings: More than half (51%) of Americans believe the typical middle-class worker has less than $150,000 in retirement savings by age 65.
• Projected savings shortfall: Over one-third of Americans expect to retire with $100,000 or less in their 401(k) plans, and 58% of individuals aged 65 and older currently have $100,000 or less saved.
• Retirement optimism varies: While only 2% of Americans report having over $1 million in their 401(k), 22% of Gen Z believe they will achieve this milestone. Conversely, 38% of all Americans believe it’s impossible to retire with $1 million in their 401(k).

401(k) Savings by Age Group

• Gen Z and younger millennials (21–34): 65% have between $25,000 and $100,000 saved. Meanwhile, 20% have $25,000 or less, 11% have $100,001 to $500,000, and 5% do not have a 401(k).
• Older millennials (35–43): 10% do not have a 401(k). Among those who do, balances are evenly distributed: 19% have less than $25,000, 21% have $25,001 to $50,000, 28% have $50,001 to $100,000, 18% have $100,001 to $500,000, and 5% have over $500,000.
• Gen X (45–54): Balances are comparable to millennials. 17% have less than $25,000, 22% have $25,001 to $50,000, 28% have $50,001 to $100,000, 21% have $100,001 to $500,000, and 5% exceed $500,000.
• Older Gen X and younger boomers (55–64): Balances remain similar despite being closer to retirement. 19% have less than $25,000, 21% have $25,001 to $50,000, 28% have $50,001 to $100,000, 17% have $100,001 to $500,000, and 7% have over $500,000. 8% do not have a 401(k).
• Retirement-age Americans (65 and older): 19% lack a 401(k), possibly relying on pensions or other accounts. Only 8% have more than $500,000, while 58% have $100,000 or less, including 36% with $50,000 or less.

This data highlights the financial challenges many Americans face when preparing for retirement, particularly for older workers nearing or at retirement age.