Jul 13, 2026
When it comes to news stories about how much Americans have saved for retirement, the tone is almost always doom and gloom.
The typical message is that Americans are underprepared for retirement, don’t have enough savings to last and will need to keep working longer — if not indefinitely.
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If you look at the data on how much a typical American has saved in their retirement accounts, the numbers show cause for concern. According to Fidelity’s Q1 2026 analysis of retirement savings trends, the average 401(k) balance is $141,000.
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However, looking at your retirement account balance alone can skew the picture, as some Americans might not be taking their true retirement wealth into account. Daniel Burnside, finance professor at the University of Rochester’s Simon School of Business, told U.S. News & World Report that “Most people probably do underestimate the assets that they have.”
With this in mind, some retirees or older Americans nearing retirement could have extra money that hasn’t yet been factored into their retirement equation. “That could help avoid the dreaded ‘one more year syndrome,’ in which people put off retirement indefinitely to save just a little more,” U.S. News & World Report.
401(k) balances in America
Of course, looking only at average 401(k) balances does not give the full picture of how prepared Americans are for retirement. Fidelity notes that it’s difficult to get an accurate overall picture of how much Americans in each age group have saved, arguing that “people may have more than one retirement account, or money saved outside of 401(k)s and IRAs.”
“Real estate, brokerage accounts, savings accounts, non-retirement CDs — and even health savings accounts — could all be earmarked for someone’s retirement,” Fidelity notes.
When broken down by age groups, Fidelity reported that the average 401(k) balance for Americans were:
- 45 to 49: $163,200
- 50 to 54: $215,700
- 55 to 59: $260,800
- 60 to 64: $257,400
- 65 to 69: $258,800
- 70+: $264,500
If someone retiring at 67 had the average 401(k) balance of $258,800 and they were following the 4% rule for drawing down their savings, they would only withdraw $10,352 in their first year of retirement, which wouldn’t likely be a livable retirement income.
Of course, there’s another source of retirement income to consider.
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Social Security in retirement
The average Social Security benefit for retired workers in May 2026 was $2,082.76. According to U.S. News & World Report, that would amount to about half a million dollars over a 20-year retirement, not including annual cost-of-living adjustments.
And that’s just the average Social Security benefit.
“Those receiving the maximum monthly payment, which varies based on earnings and retirement age but is $5,181 for someone who retired at 70 in 2026 and earned the taxable maximum, could easily see their total benefits cross the $1 million mark,” says U.S. News & World Report.
However, only a small fraction of Americans — less than 1% — receive the maximum Social Security benefit.
It’s also worth noting that there can be a marked difference between the calculations of the average amount individuals hold in retirement accounts and the median amount. Vanguard’s most recent analysis of defined contribution plans found that while the average was $167,970, the median was $44,115.
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That’s because a small number of very big accounts raises the average above the median; so, about 75% of individuals had balances below the average, and one in four had balances of less than $10,000.
And while some Americans may underestimate their potential retirement income, the fact remains that many Americans hold no retirement savings accounts at all. The Federal Reserve 2022 Survey of Consumer Finances, the most recent survey conducted, shows that only 57% of Americans ages 55 to 64 who are heads of households have retirement accounts.
Factoring in Social Security benefits can help you get a more accurate picture of what your retirement income could be. By using the Social Security Administration's benefit calculator, you can figure out what your benefits would likely be and see the different scenarios of what you’d receive based on whether you retire at 62, full retirement age, or delay retirement until 70.
Figuring out your retirement income is a highly individual process. A retirement account balance that is livable for one person could be inadequate for another. By calculating possible Social Security benefits, you can see how close your retirement account balance is to your retirement income goal.
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
