How Many Americans Have Retirement Savings? The Answer May Surprise You.

Key Points

• Without retirement savings, you might struggle during your senior years.

• A shocking number of Americans don't have a retirement savings plan they're funding.

• The sooner you begin to save, the easier it will become to build a respectable nest egg.

• The $23,760 Social Security bonus most retirees completely overlook ›

Given the choice, most Americans would probably rather spend their extra money on entertainment, vacations, or home improvements than contribute to an IRA or 401(k). But without retirement savings, you risk struggling financially once your career comes to an end and you stop collecting a steady paycheck.

If you're an average earner, you can expect your Social Security benefits to replace about 40% of your wages, assuming the program doesn't have to move forward with cuts. But it's typical for retirees to need 70% to 80% of their former income -- sometimes more -- to maintain the standard of living they're used to and do the things they've always wanted to do.

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For this reason, it's important to save for retirement steadily throughout your career. But recent data makes it very clear that a large number of Americans aren't taking this crucial step.

Far too many Americans don't have a retirement savings plan

There are different accounts Americans can use to save for retirement, such as IRAs and 401(k) plans. But a recent Gallup poll found that an astounding 40% of Americans don't have any one of these retirement plans.

To be fair, not having a retirement plan doesn't necessarily imply a lack of retirement savings. It's possible that some people are saving for their senior years in a taxable brokerage account or a traditional savings account.

For the most part, however, it's fair to glean from this data that a fairly large number of Americans are not saving for retirement. If you're one of them, it's best to try to prioritize retirement plan contributions as soon as you can. Otherwise, you may find that you're forced to make significant lifestyle changes in retirement -- and not for the better.

Starting early is key

The process of building a sizable retirement nest egg might seem daunting, and understandably so. However, the more time you give your savings to grow, the better your results are likely to be.

Say you begin saving $300 a month for retirement at age 45 and your portfolio delivers an 8% yearly return, which is a bit below the stock market's average. By age 65, you could be looking at about $165,000, which is a nice amount of money but not a whole lot in the context of what could be a decades-long retirement.

Watch what happens when you start saving that same $300 a month five years earlier. At that point, you'd be looking at accumulating $263,000 by age 65, assuming the same 8% return in your portfolio. That paints a more comforting picture.

If you're already midway through your career and haven't started funding a retirement plan, don't panic. At that point, look at your budget, figure out how much you can afford to contribute, and start putting that money to work immediately. The more of an effort you make, the happier and less financially stressful your senior years might be.

The $23,760 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

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