The median retirement savings for Americans stands at $87,000, which is too low for a comfortable retirement.
In a 2022 Survey of Consumer Finances from the Federal Reserve, the average retirement savings for Americans is at $334,000. “At current rates, this means that older generations are living on a mere $10,000 per year in retirement based on these savings alone.” This then means the majority of Americans will need to rely on Social Security benefits to make ends meet.
By 2040, It’s estimated that state and federal governments will need $1.4 trillion for public assistance costs. The projection for the program’s funds to still exist is 2035, unless Congress will take action before then. What can keep the program afloat is an improved economy with more individuals contributing to the program through payroll taxes, but this will not be the sole solution.
While the national debt is $34 trillion, Social Security’s unfunded liability is around $22 trillion, Jason Fichtner, chief economist at the Bipartisan Policy Center said. To make the program solvent for 75 years, an upfront sum of $22 trillion would be necessary today. An election year will delay any real actions also.
For many Americans without employer-sponsored plans, saving for retirement has become an increasingly uphill battle. In fact, a separate survey shows that just 58% of Americans aged 55–64 have retirement accounts, underscoring the growing challenges faced in preparing for retirement.
Some key revelations to note from the 2024 Social Security trustees report include:
- Retirement fund depletion date is less than a decade away.
- Disability fund is in good shape — for now.
- The insolvency projection has not shifted.
- A declining birth rate may affect the program.
- Immigration may help give the program a boost.
- More dramatic changes will be necessary with time.
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