Behind the numbers
One look at the Survey of Consumer Finances, and it’s not hard to understand that the punch line isn’t how Americans have saved, it’s how unequally distributed savings are. For adults under 35, the average retirement balance sheet tallies at $49,130 and yet the median is merely $18,880. This unabridged gap is convincing to show that younger workers don’t have enough to spare, let alone save. This same pattern has disseminated to other age brackets, too.
Americans between the ages of 35-44 fall under an average of $141,520 with a median of $45,000, while those at 45-54 come at $313,220 with $115,000 as the median. By the time Americans are 65-74, they arrive at $609,230, the median at $200,000. For those 75 and above, the average rounds off to $462,410, while the median is only $130,000.
This recurring divergence between average and median is cutting through the noise. A small section of savers has raised the bar of averages high above where more Americans can actually land. Fidelity’s data corroborates this: Boomers, for example, average $249,300 in their 401(k)-balance compared to a mere $13,500 for Gen Z. This large divide shows the headline average number conceals more than what it reveals. The same shift is consistent in IRAs, where boomers are averaging $257,002 and just $25,109 for millennials. Early contributors have inflated the averages, while in reality, Americans are sporadically or merely saving, rendering the typical saver leagues below the ideal number.
Who saves and who can’t
The disparity doesn’t begin with big balances; it emerges with unequal room to save. Many young workers start with no financial runway at all. Often, succumbing to pressure from student loans, rent inflation and low wages, even small savings seem far-fetched. As Vanessa N. Martinez, CEO of Expressive Wealth, puts it, “That’s one of the biggest struggles for some people, when they see a big number, that seems scary.” According to Gallup, the number of Americans with a retirement account to begin with is at 59% but participation is not inclusive because of income. Only 83% of households making $100,000 or more save, as opposed to 28% of those earning under $50,000. Education runs parallel with this shift: 81% of college-educated adults save for retirement versus 39% of those without a degree.