Prices keep climbing while paychecks feel stuck — and for millions of Americans, “retirement” is starting to look more like working longer, cutting back, or leaning heavily on Social Security.
About 20% of adults age 50 and older report having no retirement savings, showing just how common it is to start late or not start at all. Around 56 million private-sector workers still do not have access to a workplace retirement plan, which is often the simplest way to save.
For those already retired, Social Security may provide half or more of their income, leaving little room to manage rising housing, food, and healthcare costs.
This guide explains how many people are falling behind, why it’s happening, and practical steps to start catching up, backed by the latest available data.
📌 Also read: How Much Money Americans Save Each Year (by Age, Income, and State)
How Many Americans Are Behind on Retirement Savings?
Falling behind on retirement savings is not just a concern for a few. It affects millions of workers across every age and income group. Recent surveys reveal just how wide the gap has become.
Quick Snapshot of the Retirement Savings Gap
- 20% of adults age 50+ have no retirement savings — A 2024 AARP survey found that 1 in 5 older Americans are heading into retirement with nothing set aside, increasing the risk of depending almost entirely on Social Security.
📌 Source: New AARP Survey: 1 in 5 Americans Ages 50+ Have No Retirement Savings | MediaRoom
- Only 35% of non-retirees feel on track — The Federal Reserve’s 2025 SHED report shows confidence in retirement readiness has fallen since 2021.
📌 Source: Economic Well-Being of U.S. Households in 2024 | Federal Reserve Board Publication
- Workplace plan access is uneven — In early 2024, 70% of private-industry workers had access to a defined-contribution plan. Access drops to 43% for part-time employees, compared with 78% for full-time workers.
📌 Source: Bureau of Labor Statistics
Who Is Most at Risk of Falling Behind
Some groups face a much steeper climb toward a secure retirement. Gen X, now in their late 40s to mid-50s, is nearing retirement age yet many still report feeling off track. Lower-income and part-time workers face limited plan access — just 54% in the lowest wage quartile and 47% of part-timers have access to any plan, compared with 83% of full-time workers.
Gig workers are often excluded from employer benefits altogether. Research from the Government Accountability Office shows that many on-demand workers miss out on opportunities to save through payroll deductions, one of the most effective ways to build retirement security.
Why So Many Americans Are Falling Behind on Retirement Savings
Several factors are making it harder for Americans to save enough for retirement. These challenges affect both the ability to set money aside and the confidence people have in their financial future.
Rising Cost of Living and Inflation Are Crowding Out Savings
Even though inflation has eased since its peak in 2022, prices continue to rise. The Consumer Price Index (CPI) increased by 2.7% year-over-year in June 2025, with food prices up 3.0% and shelter costs up 3.8%.
According to the Federal Reserve, 60% of adults said that rising prices hurt their finances in 2024 — leaving less for retirement savings.
Lack of Workplace Retirement Plans Reduces Participation
Access to a retirement plan is a key factor in whether people save. Data from the Bureau of Labor Statistics show significant gaps in plan availability, especially among part-time workers and employees at smaller firms.
Studies from the Government Accountability Office and Department of Labor highlight that automatic enrollment in plans can dramatically increase participation rates, often reaching 90% to 95%.
Stagnant Wages and the Shift From Pensions to 401ks
Real wage growth has been modest, with average hourly earnings rising about 1% after adjusting for inflation over the past year. At the same time, the private sector has largely moved from defined-benefit pension plans to defined-contribution 401k plans.
In 2024, just 15% of workers had access to a pension plan compared to 70% with access to 401ks. This shift places more responsibility and investment risk on workers themselves.
How to Tell if You’re Behind on Retirement Savings
Use a Replacement-Rate Mindset
A common rule is to plan for retirement income that covers at least 70% of your pre-retirement earnings. For many households, aiming for 80% to 90% may provide a safer margin. The Department of Labor’s retirement workbook can help translate these targets into monthly income goals.
Run Official Calculators
Use the Social Security Administration’s calculators and the Department of Labor’s worksheets to estimate your expected Social Security and total retirement income. Compare these amounts to your target monthly budget. If there is a gap, consider increasing contributions or delaying retirement.
Check Your Limits and Adjust
Confirm you’re contributing enough to reach this year’s IRS limits, including catch-up amounts if eligible. Review your budget regularly, ideally every quarter, and increase contributions when possible.
What to Do if You’re Behind on Retirement Savings
Falling behind on retirement savings is common, but there are practical steps to help close the gap. Starting small and building momentum can improve your outlook over time.
Five Practical Steps to Start Catching Up Today
Step 1: Enroll in a workplace plan or open an IRA.
If your employer offers a 401k or 403b plan, enrolling as soon as possible is a smart move. If there is no plan at work, opening a Traditional or Roth IRA could be a good alternative. Automate monthly contributions to stay consistent. In 2025, you may defer up to $23,500 to a 401k and $7,000 to an IRA.
Step 2: Capture your employer’s full match.
Employer matching contributions often mean extra money toward your savings. For example, some matches are “50 cents on the dollar.” Matches do not count against your personal 402(g) deferral limit but do factor into the overall annual additions limit. Make sure your deferral rate is high enough to get the full match.
Step 3: Increase your contribution rate by 1 to 2 percentage points.
Small, automatic increases can build your savings steadily. Consider raising contributions with every raise or bonus. The Department of Labor offers guidance and worksheets to plan gradual increases.
Step 4: Use catch-up contributions if you’re 50 or older.
For those age 50 and above, catch-up contributions provide an opportunity to save more. In 2025, you can add $7,500 on top of the standard 401k limit. Between ages 60 and 63, a higher catch-up limit of $11,250 applies. IRA catch-up contributions remain at $1,000 for those 50 and older.
Step 5: Cut your top two or three monthly expenses to free up savings.
Look for simple ways to reduce spending, such as trimming streaming subscriptions, dining out less, or canceling unused services. Federal budgeting tools, including the Consumer Financial Protection Bureau’s toolkit and MyMoney.gov worksheets, can help identify quick savings that can be redirected to your retirement plan.
Policy Changes That Could Help Boost Retirement Savings
Some new policies and programs may make it easier for more workers to save for retirement in the coming years.
Auto-enrollment Expands in 2025
Starting in 2025, many new 401k and 403b plans must automatically enroll eligible workers, though small and new employers may have exceptions. The Treasury and IRS have proposed regulations outlining how this will work.
More Access for Part-Time Workers
The SECURE 2.0 Act reduces the service requirement, allowing many long-term, part-time employees to join workplace plans sooner. Starting in 2025, part-timers with two consecutive years of service become eligible.
State Auto-IRA Programs
If your employer does not offer a retirement plan, check if your state runs an automatic payroll-deduction IRA. Programs like OregonSaves and CalSavers automatically enroll workers at a default rate of about 5%, with an option to opt out.
Strengthening Social Security
The 2025 Trustees Report projects that combined Social Security trust funds will pay full benefits until 2034. After that, scheduled benefits could drop to about 81% unless Congress acts. This outlook highlights the importance of personal savings.
Key Takeaways to Catch Up on Retirement Savings
Many Americans are heading toward retirement with less saved than needed. Factors such as rising living costs, gaps in workplace plan access, and the shift from pensions to personal retirement accounts contribute to this challenge.
Fortunately, practical actions could help improve your situation. Enrolling in a workplace plan or opening an IRA if your employer does not offer one is a good first step. Make sure to capture any available employer match and consider increasing your contribution rate by 1 to 2 percentage points over time. If you are age 50 or older, catch-up contributions may provide additional saving opportunities.
Reviewing your largest monthly expenses could free up money to save. To understand your progress, use a replacement-rate approach. Estimate what percentage of your income you will need in retirement, run official calculators, and revisit your plan regularly, ideally each quarter.
Stay informed about policy updates like state auto-IRA programs and expanded plan access, which may offer new ways to save. When rules or limits change, consulting official resources can help you adjust your strategy effectively.
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