The typical American worker is entering later life with far less put away than many experts say is needed for a secure retirement, according to a new analysis that shows gaps in savings, access to employer plans and long-term financial stability.

Retirement Expectations and Reality

According to a new National Institute on Retirement Security (NIRS) study, among workers who had any defined contribution retirement savings at all, the median balance stood at $40,000 in December 2022. But when all workers were included—even those with no savings—the median dropped to $955.

Even among those who have started saving, the savings cushion is often thin. A Northwestern Mutual study published in April found that one-quarter of savers said they had “one year or less of their current annual income put aside for it,” underscoring how quickly an unwanted life event—such as job loss, health emergencies or market downturn—could derail long-term saving plans.

The research identified a lack of access to workplace retirement plans being a significant barrier to saving for later life. Almost half of U.S. workers did not participate in any employer-sponsored retirement program, the NIRS report found.

“The bottom line is that if Americans are not saving for retirement through their employer, then they are probably not saving at all,” the report said.

A 2025 brief from the Pew Charitable Trusts estimates that almost 56 million private-sector workers in the U.S. do not have access to an employer-sponsored retirement plan, leaving them reliant on personal savings and Social Security when they stop working.

The report also found that many of these workers struggled to cover basic expenses and often had little or no money left at the end of the month, making long-term saving difficult—even when they actively wanted to prepare for retirement.

The ‘Three-Legged Stool’

Retirement policy has long leaned on the idea of a “three-legged stool” made up of Social Security, pensions and individual savings, but the report said that in practice, that structure is rare. NIRS found that just under 7 percent of older, nonworking adults received income from all three sources.

While almost all working-age adults pay into Social Security, only about half participate in either a defined benefit pension or a defined contribution plan, and the rest are left with little beyond their own limited savings.

“At a time when Americans are facing a growing affordability crisis, we need to recognize that retirement should be part of that conversation,” said Dan Doonan, NIRS’s executive director. “Most retirement programs today rely on workers saving voluntarily, with the tension between saving and the cost of buying a home, daycare, and college creating enormous challenges for the middle class. This research shows the fragility of both the nation’s retirement infrastructure and retirement preparedness for the typical U.S. household.”

Growing Poverty Among Older Americans

Poverty among seniors rose to 15 percent in 2024, up from 14 percent the year before, according to the study. Researchers say inadequate retirement savings are likely a major driver of that increase.

Although recent legislation has made modest improvements, NIRS notes that unresolved issues—including limited access to savings plans and uncertainty around the future of Social Security—continue to threaten retirement security for many Americans.

Another Pew analysis, from 2024, examining retirement income shortfalls found that millions of Americans were on track to fall well behind their retirement targets. The study projected that many households would face persistent annual gaps between what they would need and what they were likely to have in retirement, particularly among lower- and middle-income workers. Pew also found that most retirement savings in the U.S. system flowed through employer-based plans, meaning those without access were far more likely to reach old age with limited financial security.