The median for all families in the U.S. is just $5,000, and the median for families with some savings is $60,000.

I find this very hard to believe. Nobody can retire with 5k in the U.S. The money will be gone within a year. Is it possible? What is the actual figure?

If indeed 5k is an accurate figure, how do 50% of old Americans survive in their old age? Do most old Americans rely on their children for financial support?

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    "All" appears to include families that are years or decades away from retiring, so that will also pull the median down.
    – chepner
    Dec 15, 2016 at 14:45
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    It's not just the one you asked about; all the charts/numbers they showed are too aggregated to be useful as is normally the case. No one splits out between all of have/don't have savings at all, if a traditional pension is available, income brackets (if you make $15k/year SS isn't a bad deal, if you make $150k/year you need a lot of additional savings), and age brackets. It gives too many numbers for the general public even though without it the numbers shown are useless for anything other than clickbait (eg you can't compare yourself to your peers effectively). Dec 15, 2016 at 17:05
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    @Mango it might last a little longer if savings doesn't count things like a paid off house, car etc... although I don't think it is materially relevant whether they are able to survive one month or two years.
    – user12515
    Dec 15, 2016 at 18:50
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    @Mango: Certainly you need to spend something on food &c (unless you're a back-to-the-land homesteader). But my point is that it's quite possible (and I have done it) to make something in the neighborhood of $150K/yr, yet spend around $25K. It all depends on what you want.
    – jamesqf
    Dec 15, 2016 at 20:17
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    I think this question is on topic. It's about retirement savings, which is well within our area of interest, and has generated some good on-topic answers.
    – Joe
    Dec 16, 2016 at 22:00

5 Answers 5


Social security and pensions make up a big part of it. You may want to look at the source of the data. If a person, has 5K at Vanguard, 5K at Fidelity and 100K at the bank; Fidelity will report on that person as having only 5K. Vanguard will do the same.

The opening pitch of a life insurance salesman sometimes includes the "100 man story". Before retirement age: 26% of people will die, 54% will be broke, 5% will work, 4% will be secure, and 1% will be wealthy. Then they sell you life insurance which is a horrible product for retirement savings.

If you further dig into this subject you will find a great disparity between the mean and median retirement savings. That is because many Americans have none, and those that do skew the average upward and have no where near mean or average.

Its like this with other things in personal finance. For example those with actual credit card debt have much higher than the average. As those with none, or even no credit cards skew the average downward.

In my opinion it is like this because of behavior. If one saved half of the average car payment over their working life in a growth stock mutual fund, they would make it to that 4% category. If they also had a good salary, kept debt to a minimum, and saved a healthy amount they would make it to that 1% category. It was a daily choice that was made many years prior to retirement.

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    "Then they sell you life insurance which is a horrible product for retirement savings" Amen. Get life insurance. Save for retirement. Don't use one thing to do both
    – Kevin
    Dec 15, 2016 at 14:44
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    Life insurance is there to ensure the OTHER people in my family are financially stable and can retire without me.
    – Freiheit
    Dec 15, 2016 at 14:55
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    Disagree. I have worked in the life insurance business for many years (disclaimer: not in sales) and whole life insurance can be a perfectly good strategy for all three of its purposes (protection, living benefits/investments, estate transfer) if structured correctly. Be sure to note the last clause in that sentence. Just because there are predatory salesmen and not-so-trustworthy companies out there doesn't mean you all should make such sweeping generalizations.
    – glassy
    Dec 15, 2016 at 16:47
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    There is definitely a generational shift occurring between defined contribution plans (i.e. 401(k)) and defined benefit plans (i.e. pensions) in the U.S. My father, for instance, has a fairly good pension plan so doesn't need to save has much as I will, in real terms. My grandparents, retired, I think both live almost entirely off of social security and pensions.
    – PGnome
    Dec 15, 2016 at 16:50
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    "26% of people will die, 54% will be broke, 5% will work, 4% will be secure, and 1% will be wealthy." - So, what are the last 10% doing? Selling life insurances?
    – hoffmale
    Dec 15, 2016 at 23:20

I find this very hard to believe

Believe it. The bottom quarter of American households have negative net worth, and the bottom three quarters have no more than a tiny amount saved up.


In an emergency, 63% of Americans would not be able to come up with $500 without going into debt.


Nobody can retire with 5k in the U.S. The money will be gone within a year. Is it possible?

Now you begin to see why the long-term stability of Social Security and Medicare are at present hot topics in American political life. Without them, a great many more Americans would die in poverty.

What is the actual figure?

The $5000 figure is accurate but irrelevant; that median includes people who are thirty years from retirement and people who are two days from retirement.

The more relevant statistics are those restricted to people at or close to retirement age, and they can be found lower down in the article you cite, or in numerous other studies. Here's one from the GAO for example:


The figures here are, unfortunately, no less terrifying:

  • 29% of retirement-age households have neither savings nor pension
  • 23% have no savings but some kind of pension
  • Of the 48% who do have savings, the median is in the range of $104K-$148K

Now $104K is a lot better than $5K, but it's still not much to retire on.

Why we believe that it is reasonable to throw out all the zeros before taking the median, I do not know. That seems like bad math to me.

UPDATE: There is some discussion of this point in the comments; all I'm saying here is that this is a clumsy and possibly misleading way to characterize the situation. The linked report has the actual data, but let's try to summarize it here in a more meaningful way.

Let's suppose that we make buckets for how dependent on SS is a retirement-age household to avoid starving to death, being homeless, and so on?

  • $0 saved / totally dependent on SS: 41%
  • some savings, but less than $100K saved / mostly dependent (interest on less than $100K is poverty level income): 28%
  • $100K - $500K saved / somewhat dependent (interest on $100K-$500K approximately replaces an above-poverty income): 22%
  • More than $500K saved: independent: 9%

Maybe these buckets are not ideal, and we could move them around a bit. The takeaways here are that the ratios of nothing:inadequate:barely adequate:comfortable is about 40:30:20:10. That only the top decile of retirement-age households can fund a comfortable retirement without help illustrates just how dependent on SS American households are.

how do 50% of old Americans survive in their old age?

Social Security and Medicare. As the cited GAO report indicates:

"Social Security provides most of the income for about half of households age 65 and older."

Do most old Americans rely on their children for financial support?

One day I met a woman at a party and we were making small talk about her kids. She had a couple already and one more was on the way. "I want to have lots of children to support me in my old age", she said. "Do you support your parents?" I asked, which frankly seemed like an entirely reasonable question. "Of course not! I can't afford it. I've got a baby on the way and two more kids at home!"

I left her to draw her own conclusions as to the viability of her retirement plan.

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    @horsehair: I think you may have missed the point of the anecdote. The same forces which prevented the woman from supporting her own parents will likely prevent her children from supporting her. Dec 16, 2016 at 3:11
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    @EugeneRyabtsev: My point is that I'm not sure what value there is in giving a measure for the center of a distribution, and then artificially moving that center far, far away from the actual center. Either the median is not actually a useful measure, in which case we should find a more useful measure and justify it, or we should say what the actual median is. The problem is that the story we're trying to tell is too complex to be characterized by the 5th decile; we should be characterizing it in more complex ways. Dec 16, 2016 at 5:45
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    @Snowman: That's what we do. What I'm saying is that I don't understand why that is a useful measure. Here, suppose I give all X of those people ten bucks because I'm in a generous mood. That expenditure suddenly moves the value of your proposed metric from $100K to $10 because now there are no zeros. The metric changed in magnitude by a factor of ten thousand, but no ones situation materially changed (except mine). So what is it measuring? Dec 16, 2016 at 14:45
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    @EricLippert It isn't an artificial median; it's just the median of a different distribution, and it is useful information. It's also additional information; it doesn't reduce the amount of information and it is still clear that the median of the original whole distribution is 0, since 48 < 50. Having that extra information paints a better picture of the whole distribution and reveals things like: Approximately 74% of retirement-age Americans have less than or low 100k in savings
    – Paul
    Dec 16, 2016 at 20:50
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    The reason it's interesting is that there is the (reasonble) assumption that the [population of people who save for retirement] is an interesting population to study in and of itself, separate from the [population of the US]. This is appropriate when you have a big discontinuity; you do here, because there's nearly no reason to save for retirement if you're in the bottom quartile and know you will continue to be in that bottom quartile - you'll get enough from SS and Medicare that the extra pittance you could save are irrelevant.
    – Joe
    Dec 16, 2016 at 21:58

Note that the quote distinguishes between "all families" and "families with some savings" - this just means there are so many families with less than 5k that they equal all those with savings above 5k. That might be because they are young and haven't started yet, or because it is just not a priority for them compared to food and rent.

Nothing about the quote suggests that anyone believes once you've saved 5k, you're done. In fact since they show savings vs age, you can immediately see many people still have decades to save more. They may have 5k or less now, but they're not retiring now.

How do you survive if you get to 65 and have nothing saved? There is some government money (social security) and many people sell their houses or get a reverse mortgage. Having equity in a house is not the same as having savings. And some older people live very frugally - they stop buying clothes, they stop redecorating their houses - while others live in flat out poverty. But you can't tell if that is their future from the fact they only had 5k saved when they were 32.

  • "compared to food and rent" Or cable TV or coffee shop visits or books. Just because you aren't struggling to pay the basics doesn't mean you are saving a lot; lots of people tend to find places to spend money even when those places are nowhere near necessities.
    – user
    Dec 15, 2016 at 14:48
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    any conversation about retirement savings is always full of suggestions that people are wasting their money enjoying themselves when they could be saving. I only wanted to point out that for people who are struggling to get by now, saving for someday is a luxury they can't (yet) afford. Such people exist. And yes, people also exist who st the "necessities" bar selfishly and luxuriously high. That changes nothing about my answer, though. Having 5k saved so far (or nothing) doesn't mean you can retire on 5k (or nothing) Dec 15, 2016 at 14:53
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    @senschen: You seem to be assuming that spending money equates to happiness. I suppose a lot of people would think, at first glance, that I live in that self-enforced poverty, because I long ago decided not to spend money on things I don't actually enjoy. I found that there are so many enjoyable cheap, or even free, things that I have very little time to spend on the expensive ones.
    – jamesqf
    Dec 15, 2016 at 18:37
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    Not that I want to encourage jamesqf and senschen to argue on my answer, but I have discovered that the more money I have, the less need I feel to spend it. I think you would both benefit from 15 minutes sitting with that observation. Dec 15, 2016 at 21:25
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    @KateGregory Agreed wholeheartedly. At this point, (admittedly still early into my adult life) if I saved every penny I could aside from the basics, I still wouldn't be making any significant contribution to retirement (that I may not even get to enjoy as a young person seeing the age of retirement rising every few years). Quite frankly, my life would be far more enjoyable spending within my means for the next 40-50 years then killing myself at the end of it, rather than retiring at 75 with piles of money and being too old to do anything with it.
    – SGR
    Dec 16, 2016 at 9:21

Statistics are often tough to grasp. Specifically, we need to understand the exact context and implication of the data and how it's presented. An example -

I look at real estate sales data for a given town, and find that for the last 10 years, the average sale price has dropped, 3%/yr, every year for these 10. What can I conclude?

  • Demand has dropped, the town is undesirable
  • Demand is steady, but lower prices homes are turning over faster.
  • Demand is through the roof, but new homes are smaller, and even though all homes are enjoying a year on year gain ahead of inflation, the new sales prices drag down the average.

Now, to your data. You don't mention age.

enter image description here

When we look at this chart, combined with the next -

enter image description here

The picture, while still bleak, is at least more clear. Nearly half of pre-retirees have no "retirement" savings. If that lower half is running close to zero, the average for the upper half is nearly twice the reported $164K.

Even now, there are important bits going unaddressed. People who have had no access to retirement accounts, either through lack of company availability, or self-employeds who just ignored them, may very well have saved outside of retirement-labled accounts. You can see these graphs are tracking only 401(k), IRA, and Keogh accounts.

Last, social security for the $30K earner will replace nearly half their working income at retirement, almost 65% if they work till 70. I don't advocate counting on SS for the entirety of one's retirement income, but the way SS benefits are structured, replacement benefits are far higher (as a percent) for lower wage workers, as the system intended.

To conclude, median alone is too small a data point to be useful, in my opinion. This kind of information presented in these charts is far more preferable to get a fuller picture.


If you dig deeper and look at the original study, what's being measured is "retirement-plan participation": specifically, money in 401(k) plans and IRAs. This omits every other possible source of retirement money: things such as general savings, non-retirement investments, property ownership, pensions, etc.

As an extreme example, I know someone who's retired with property worth a million dollars, another million dollars in stock, a pension providing thousands of dollars a month plus health insurance, and not one penny of what the study would consider "retirement savings".

Yes, the average American family is under-prepared for retirement. But it's nowhere near as bad as the article makes it sound.

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    I highly doubt that a considerable number of the 29% of retirement-age households which have neither savings nor pension are in the situation you describe. Dec 16, 2016 at 8:56

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