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How much Americans have actually saved for retirement

While the respondents anticipate they’ll require nearly $1.5 million on average to afford a comfortable retirement, they’re still far off from achieving this savings target.

In fact, the average amount U.S. adults hold in a retirement account today is $88,400, down from $89,300 in 2023, per the study.

This decline is likely due to higher consumer prices and interest rates — one study found a growing number of workers are dipping into their 401(k) accounts to cover their bills and debts.

The retirement savings gap is even wider for Gen Z adults, who expect they’ll need $1.61 million for their golden years, but have only saved about $22,800 on average so far. Still, Gen Z has started saving much earlier than their boomer counterparts did, and hope to retire earlier as well, at 60 — compared to boomers, who say they’ll work until they’re 72.

"These numbers tell a fascinating story about the profound shift in financial planning that has taken shape in America," says Javeri Gokhale.

"Young people today recognize the value of retirement planning and building wealth early on in life and are getting a significant head start over their parents and grandparents.”

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How to catch up

First off, make sure you’re contributing to a tax-advantaged retirement vehicle that makes sense for you. If your employer offers a 401(k) with matching contributions, you can let your money grow tax-free until retirement and enjoy a tidy boost to your savings.

If you’re deciding between a traditional IRA or a Roth IRA, most experts recommend the latter if you’re young and expect to be in a higher tax bracket in the future. That said, if you expect to be in a much lower tax bracket in retirement, it might make more sense to opt for the traditional IRA and pay taxes on your withdrawals later.

Next, look for ways to boost your income outside of your 9 to 5. You could perhaps rent out a spare room in your house — or, if you don’t want to deal with the hassles of being a landlord, you can invest in shares of vacation homes or rental properties instead.

Javeri Gokhale also emphasizes the importance of a solid financial plan, which she explains “can help people get to and through retirement by minimizing exposure and preventing anyone from paying more in taxes than they should be — potentially preserving thousands of dollars in their nest eggs."

Consider speaking to a financial adviser who can evaluate your financial situation and goals and set you on a steady path to retiring richer.

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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

Disclaimer

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