Key Takeaways
- As per 2022 Federal Reserve statistics, only 57% of individuals aged 55 to 64 have a retirement account, a rate not seen in nearly 30 years.
- For those with retirement accounts in this demographic, the median balance stands at $185,000.
- Recent Empower figures indicate median savings of $253,454 for people in their 50s and $186,902 for those in their 60s.
- Retirement readiness in this age cohort greatly depends on factors like home equity, access to work plans, and market volatility.
- A 2024 AARP survey noted that about one in five adults over 50 doesn’t have any retirement savings.
Retirement Savings for Americans Aged 55 to 64
According to the Federal Reserve’s Consumer Finance Survey from 2022, 57% of households with heads aged 55 to 64 possessed retirement account funds. This figure, while an improvement since 2019, remains one of the lowest participation rates since 1995. Additionally, that same 2024 AARP study highlighted that one in five adults over 50 lacks any retirement savings.
Households’ income and net worth generally rise with age. The Federal Reserve notes that family wealth tends to grow over time, peaking just before retirement.
For those aged 55 to 64, median income and net worth are often at their peak, which reflects years of earning and saving. It’s worth noting that the median indicates where half the households have more and half have less, thereby balancing out any extremes.
Typically, people in this life stage have fewer financial obligations tied to children, which might allow for more financial leeway. Yet, many are still not prioritizing retirement savings. Some may find themselves retiring earlier than expected or reallocating funds for future income needs.
“Many families are consolidating accounts or even retiring early as they prepare for income planning,” noted Eric Ludwig, a director at the American College of Financial Services. “Others simply haven’t saved enough, and they’re, well, sort of opting out.”
Why It Matters
This information highlights that many Americans in this age range are approaching retirement without sufficient savings. Understanding the trends can help individuals evaluate their financial situations before exiting the workforce.
Typical Retirement Savings for Those Aged 55 to 64
The Federal Reserve reported that the median balance for households with retirement accounts aged 55 to 64 was $185,000 in 2022. While this figure exceeds that of younger households, it falls short compared to what those aged 65 to 74 typically have.
Empower’s 2025 data indicates that the median 401(k) balance for individuals in their 50s is $253,454, while for those in their 60s, it stands at $186,902.
“Two households of the same age can show markedly different retirement readiness based on asset ownership and access to workplace plans,” remarked Ludwig. “If your assets are significantly tied to market performance or difficult to access, simply increasing your balances may not enhance your security.”
At this stage, individuals often shift focus from accumulating savings to evaluating how to use existing resources for retirement. Ludwig advises making rough estimates of expected retirement expenses, factoring in Social Security and guaranteed income, and planning for the next 20 to 25 years based on the residual amount.
Strategies to Boost Savings as Retirement Nears
Mindy Yu, senior director of investments at Betterment, emphasizes the necessity of regularly reassessing both savings objectives and investment allocations as retirement approaches. Ensuring alignment with income requirements, risk tolerance, and timing can help keep households on track as they get closer to retirement.
Yu recommends utilizing retirement planning tools or consulting a financial advisor to re-evaluate financial assumptions and identify any shortcomings. For those still able to save, multiple strategies can enhance contributions and increase cash flow.
- Examine Your Expenses: Taking a close look at monthly spending may help pinpoint areas where you can cut back, particularly in discretionary areas like dining out or entertainment subscriptions.
- Lower Your Debt: Paying down high-interest debts can free up more money for retirement savings.
- Maximize Contributions: For those with access to company-sponsored plans like 401(k)s or IRAs, raising contributions may be possible, especially with employer matching.
Retirement preparedness varies widely among people nearing the end of their careers, but late-career decisions can significantly enhance financial security.
