When is the average american worrying about retirement learn how and when to plan for retirement

By Matt Mayerle
Modified on May 22, 2024

Whether you’re well into your fifties, or just hitting your twenties, planning for your retirement is a big deal. 

But it’s also a scary topic. 

How do you know when it’s time to start preparing for retirement? Is there a possibility of starting too late? 

There are dozens of unknowns that come with planning for retirement and many Americans are becoming more and more concerned about their financial future. 

We understand how intimidating it can be, which is why we’ve created this guide to help you understand when most Americans have started worrying about retirement and how to financially prepare. 

Table of Contents

When Does the Average American Begin Thinking About Preparing for Retirement?

Saving for retirement is something that may or may not have been drilled into your brain since the day you started your first job — even if maybe you didn’t realize that’s what you were being told to save for.

And if you’re here reading this, you’re probably one of the 63 percent of Americans who are questioning if they are saving enough money for retirement — or if you’re way off track. 

Among adults, the average retirement savings amount is $60,000 dollars, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households.

What’s interesting about this is that for many Americans, thinking about retirement goes one of two ways:

  1. They start young. 4 in 10 workers say that they started saving for retirement in their 20’s, according to a study done by the Morning Consult. 
  2. They wait until they’re more comfortable with their finances. A quarter of those surveyed said they waited until their 30’s to start saving, while another quarter of those surveyed waited until 40+ years old to start saving for retirement. 

After a global pandemic, are retirement concerns shifting? Are American’s beginning to worry about retirement at a younger age?

How Much Money Does the Average American in Every Age Group Save for Retirement?

According to the National Institute on Retirement Security, nearly 40 million U.S. households have no retirement savings. 

It is estimated that Americans, as an entire nation, are actually $4.3 trillion short on savings retirement — as in Americans have 4.3 trillion dollars less than they should have in retirement funds. 

The most recent study from the Federal Reserve found that the average balance of retirement accounts in the United States was $60,000. Leaving Americans with an average of $228,900 in retirement funds, which might seem like a significant amount, but for many retired households, medical bills alone over the course of their retirement will cost nearly $200,000. 

So, what do retirement account balances look like by each generation or age group? The 2017 study from the Center for Retirement Research found the following: 

  • Adults ages 35-44 had an average IRA balance of $37,000
  • Adults ages 45-54 had an average IRA balance of $80,000 
  • Adults ages 55-64 had an average IRA balance of $104,000. 

If American’s plan to retire by the average age of 64, will their median of $104,000 be enough to live off of? As we mentioned above, it’s not likely. 

But are American’s beginning to worry about retirement at a younger age? Possibly.

According to Fidelity, the average balance of 401(k) accounts for Americans between the ages of 20-29 was $15,000 by the end of 2020. But is there something more causing this shift? Does it depend on age, or does it depend on the area of the country people live in? Or is it something else?

When American’s in Each Area of the Country Start Planning for Retirement

When does the average American in your area start thinking about retirement? CreditNinja surveyed over 3,000 Americans to find out — check out this map of the United States to see at what age residents in your state are starting to worry about retirement.

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What else did we find during our research? 

We asked dozens of Baby Boomers and Gen Xers what financial advice they would give to younger generations, and here’s what they had to say: 

  • Almost 50 percent of respondents recommended starting a retirement fund as early as your 20’s. 
  • Around 20% of respondents advised to work on building your credit score and having an emergency fund started.
  • 90 percent of respondents said that they would be more concerned with financial issues than being single or alone by the time that they retire.

What about after a global pandemic, are retirement concerns shifting? Concerns are certainly shifting, as 1 out of every 3 Americans say that they plan to retire later, due to the pandemic — but even scarier, 1 in 5 say they may never completely retire due to financial concerns.

Today, some Americans are beginning to start thinking about retirement as early as 18 years old. 

Which is good news for younger generations, as they become more financially aware and more resources become available to help them better understand how and when to plan for retirement. 

Especially because our survey also found that over ½ of the respondents don’t expect to fully retire when they are older, so preparing the younger generations is extremely important to not continue this cycle.  

Do You Know When to Plan for Retirement Financially? 

One of the biggest questions people have when they start thinking about preparing for retirement is, “When should I start saving for retirement?”

The truth is, there really is no “right” age, but it’s never too early to start saving for retirement. 

Let’s look at an example of how starting early, even in small increments, can help you even 30 years down the road. 

Annie started saving $250 a month from the time she turned twenty-five. Her parents set her up for success by helping her open a tax-deferred retirement account with a 7% annual return rate. 

After ten years of contributing $250 a month, Annie decided to stop contributing to the account altogether. 

When Annie turns 65, her $30,000 savings account will have turned into more than $338,000. 

Say Annie had waited until she was 30 years old to open a tax-deferred retirement account with the same interest rate, but instead of saving $3,000 a year for just ten years, she saved $3,000 a month for thirty years

By the time Annie turns 65, Annie will have set aside $90,000 of her own money, and it will grow to only about $303,000.   

Do you see what a difference starting early can make? Every little bit counts. Whether you are able to save $50 a month or $300 a month, starting early will set you up for success as you reach the age you plan to retire at. Curious about how much you should be putting aside every month in order to hit your retirement goals? Our retirement calculator is a great resource to give you a clear picture of what you should expect and how you can adjust your expectations and goals.

How Do You Plan For Retirement? A Look Into Successful Retirement Savings

Whether you’ve been saving for retirement for years, or you’ve just started saving, how can you tell if you’re on the right track to meet your retirement goals? 

What’s your retirement plan? Do you have one? 

Whether you answered yes or answered no, it’s vital that you plan for the future. 

Unfortunately, there’s no way of knowing what the future holds, but there are ways you can better prepare financially for retirement, including:

Prioritize Your Retirement Goals

  • Do you want to fully retire by a certain age? 
  • Are you planning on working part-time or full-time up until that point? 
  • Is retirement about enjoying life more (as it should be) and working less? 
  • Or are you planning on saving just enough to pay for essentials? 

Try to get a clear picture of what retirement looks like to you. This can change throughout the years, but it’s helpful in understanding when and how much you’ll need to start saving to reach your goals.

Research Retirement Plan Options

Often, people are intimidated by the idea of starting a retirement plan — there are so many options and so many stipulations that come with picking the correct one — but it doesn’t have to be. 

The Internal Revenue Service provides all sorts of resources to help you decide which type of retirement plan might be best for you and your specific situation and needs. 

If you work for a company or employer that provides retirement plans, take time to learn about: 

  • If/how your contributions will be matched
  • How much you are allowed to contribute each year, and
  • What tax advantages come with the plan you choose.

Knowing When to Plan for Retirement Is Something Many Americans Struggle to Understand — Let CreditNinja Help With Your Financial Needs

Are you getting a late start on saving for retirement, or are you ready to jump in full force to get ahead on saving for retirement? Being financially competent is a great place to start… 

and CreditNinja is here to help! 

We’ve got the financial resources you need to set yourself up for success in the future. 

Whether you’re concerned about consolidating your debt or improving your credit score to reach your long-term retirement goals — here at CreditNinja, we pride ourselves on helping our customers find financial freedom and success. 

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