Americans Ages 55 to 64 Are Not Financially Ready for Retirement

Retirement savings for Americans ages 55 to 64 vary widely: Federal Reserve data show that 43% of households in this age group had no money in retirement accounts in 2022. Among households that did have an account, the median balance was $185,000, a figure that needs context before it can guide a personal plan.

What the numbers show for Americans ages 55 to 64

The Federal Reserve’s Survey of Consumer Finances found that 57% of households headed by someone age 55 to 64 held money in a retirement specific account in 2022, the latest year covered by the data described here. The remaining 43% had no savings in those accounts. A separate 2024 AARP survey found that 20% of adults age 50 or older had no retirement savings of any kind.

Those findings measure different groups and different things. The Federal Reserve figure covers households headed by people ages 55 to 64 and asks about retirement accounts. The AARP result covers adults 50 and older and includes savings outside retirement accounts. They point to a broad shortfall, but they should not be treated as directly equivalent estimates.

People in their mid fifties through mid sixties are often in their peak earning years, and family assets generally rise with age, according to the Federal Reserve data. Still, earnings do not guarantee that someone can save. Access to a workplace plan, income, time spent contributing and changes in retirement timing all shape the result.

Why a $185,000 median needs context

The median is the midpoint, not an average or a recommended target. Half of the households with retirement accounts had more than $185,000, and half had less. It also excludes households with no retirement account, so it does not describe the entire age group.

Balances for this group are higher than those held by younger households, while older retirees report higher balances. Even so, a larger account does not automatically mean stronger retirement finances. Two households of the same age can have different prospects depending on what assets they own, how much of their wealth is tied to housing, and whether they had access to workplace plans. A balance that moves with markets or sits in assets that are difficult to access may not provide dependable income.

Eric Ludwig, director of the Center for Retirement Income at the American College of Financial Services, has described a mix of situations among people nearing retirement. Some are bringing accounts together or shifting assets as they plan income, while others have not built substantial savings or are leaving retirement saving behind.

Turn the account balance into an income question

As retirement gets closer, the task shifts from building a balance to estimating how that money may support annual expenses. A basic starting exercise is to estimate expected yearly costs, subtract guaranteed income, then multiply the remaining gap by 20 to 25 years. This is a rough planning tool, not a promise that a particular balance will cover every expense.

Write down the expected expense figure and the guaranteed income figure separately. The gap between them gives a clearer question to investigate than an account balance on its own: how much income will savings need to provide? The answer depends on a household’s spending and income, so the $185,000 median cannot establish whether any one person is ready to retire.

Steps to take in the final working years

Mindy Yu, senior director of investing at Betterment, recommends revisiting assumptions and matching a savings approach to income needs, risk tolerance and the time left before retirement. A planning tool or a financial advisor can help identify gaps. For a first review, gather current account balances, estimate annual expenses and list guaranteed income, then compare the figures.

• Review spending: Look for discretionary costs that could be reduced, such as restaurant meals or subscriptions that are no longer used.
• Address costly debt: Paying down high interest credit card or personal loan balances may leave more cash available for saving.
• Check contribution options: If you are still able to save, consider whether you can raise contributions to a workplace plan or an IRA. Check whether your employer offers a match.

These steps depend on a person’s cash flow and circumstances. A household with little room in its budget may have fewer options than one that can redirect spending. Workplace plan access also differs, which is one reason savings outcomes can diverge even among people of similar age.

Can the final working years change the picture?

Retirement readiness is not captured by one median balance or one age group statistic. The data show both a sizeable account ownership gap and wide differences among savers. A current spending estimate, income calculation and review of available contribution options can help clarify what adjustments remain possible before work ends.