1. PERSONAL FINANCE

60% of Americans Aren’t Saving Enough for Retirement

60% of Americans Aren’t Saving Enough for Retirement
 Updated 
May 10, 2025
Key Takeaways:
  • A Freedom Debt Relief survey found that 60% of Americans save less than $1,000 a year for retirement.
  • The best time to start saving for retirement is right now.
  • Try to save a regular amount for retirement each month and increase this amount if you get a raise.

What’s your target retirement date? If your answer is, “I don’t have one,” you're not alone. Saving money for retirement is something we all know we should be doing. But like so many other things in life, it’s easier said than done.

Saving for retirement

According to a recent survey conducted by Freedom Debt Relief, 60 percent of American households are saving less than $1,000 per year for retirement. It’s not that Americans don’t want to build retirement savings—they often just find it difficult to have money to set aside. 

You may know the feeling. You work hard, but bills add up quickly. Keeping the lights on and food on the table naturally comes before future goals like retirement. Sometimes, even if you otherwise have good financial habits, when you're done paying your monthly bills, there isn't a lot left over.

According to the survey, 32 percent of Americans say that everyday expenses are the biggest barrier they face when trying to increase their retirement savings, and 17 percent said that their debt was getting in the way of their savings.

But just because you haven't been able to set aside retirement savings before doesn't mean you've missed the boat. There are small steps you can take to prepare for retirement right now, and they don't all require money, either. 

One of the most important things you can do is educate yourself about retirement savings, including how much you need and what tools can make the job easier.

How much should you save for retirement?

Many factors affect how much you need in retirement savings, including:

  • Your age

  • The cost of living where you plan to retire

  • Whether you expect to have other sources of retirement income (i.e. a job, Social Security)

  • Your life expectancy

  • Your health

  • How you plan to spend your time in retirement

If possible, it’s good to save 15% of your income for retirement. If that doesn’t work for your situation, try 10% or even 5%. Saving any amount for retirement is better than not saving at all. 

A retirement calculator can help you figure out the amount you need to save. One helpful calculation is to estimate your annual living expenses, and then subtract the income you’ll receive from Social Security. The difference is the amount of money you’ll need each year from your own savings.

For example, if you think you'll need $50,000 per year to cover your retirement expenses, and you expect to get $20,000 per year from Social Security, then you need to save enough to cover $30,000 of expenses per year on your own.

Retirement savings rule of 25

One popular rule says to take the annual expenses you need to pay on your own, then multiply this by 25. This is supposed to tell you the amount of savings you need to cover your retirement expenses for 30 years, assuming you withdraw 4% per year. In our example above, multiplying $30,000 by 25 would give you a retirement savings goal of $750,000.

When should you start saving for retirement?

Now. Because time is the most important factor in building wealth for retirement. Your money is like a snowball at the top of a hill, and the investment income is the snow that builds as the ball rolls down the hill. The longer the snowball rolls, the bigger it gets.

The same is true of your retirement savings. The earlier you start saving and investing, the more likely you are to have enough for retirement. For example, if you start saving $5,000 per year at age 25 and earn a 7% return on your investment, your retirement account will be worth about $1 million when you hit age 65. On the other hand, if you wait until you’re 45 to begin, you need to save over $24,000 per year to end up with $1 million at age 65 (assuming the same 7 percent rate of return).

What tools can help you stay on track with retirement savings?

There are a lot of great apps and tools to help with retirement savings today. Here are a few favorites:

  • Empower has a terrific retirement calculator and a 360-degree view of your money.

  • OnTrajectory is another great retirement planning tool and calculator.

  • Robo-advisor apps are low-cost ways to invest for the future that take the stress out of managing your investments on your own.

  • Mint offers a free version of its app for basic budgeting and saving.

In order to be a good steward of your money, it’s also important to keep track of what you have and what you spend. There are many tools, like the Mint app, to help you do just that.

Top tips to ensure you’re saving enough for retirement

Here are some tips that can help you build your retirement savings:

  • Pay down high-interest debt if possible. Getting debts with high interest rates, like credit card debts, off your plate can give you more money for retirement savings. If you need help dealing with your debt on your own, consider a debt relief program.

  • Claim a 401(k) match if you're eligible. This is money your employer puts in your retirement account on your behalf to match some or all of the money you put into your 401(k).

  • Use an IRA if you don't have access to a 401(k). Traditional IRA contributions save you money on taxes right away, but you pay taxes on withdrawals from these accounts. You pay taxes on your Roth IRA contributions in the year you make them, so you can usually withdraw them tax-free in retirement.

  • Automate your retirement savings. A 401(k) should let you put a portion of each paycheck into your account. IRAs may let you link a bank account and set up an automatic money transfer on a schedule that works for you.

  • Increase your retirement savings whenever you get a raise. Do this as soon as possible to help your money grow even faster.

  • Continue to invest during market ups and downs. The stock market naturally goes up and down. Losing money from time to time is normal, even if it isn't fun. Stay the course and keep investing on a regular schedule if you can.

A look into the world of debt relief seekers

We looked at a sample of data from Freedom Debt Relief of people seeking the best debt relief company for them during November 2024. This data highlights the wide range of individuals turning to debt relief.

Credit Card Usage by Age Group

No matter your age, navigating debt can be daunting. These insights into the credit profiles of debt relief seekers shed light on common financial struggles and paths to recovery.

Here's a snapshot of credit behaviors for November 2024 by age groups among debt relief seekers:

Age groupNumber of open credit cardsAverage (total) BalanceAverage monthly payment
18-253$9,011$282
26-355$12,647$390
35-506$16,172$431
51-658$16,725$529
Over 658$17,047$499
All7$15,142$424

Whether you're starting your financial journey or planning for retirement, these insights can empower you to make informed decisions and work towards a more secure financial future

Credit card debt - average debt by selected states.

According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average credit card debt for those with a balance was $6,021. The percentage of families with credit card debt was 45%. (Note: It used 2022 data).

Unsurprisingly, the level of credit card debt among those seeking debt relief was much higher. According to November 2024 data, 88% of the debt relief seekers had a credit card balance. The average credit card balance was $15,618.

Here's a quick look at the top five states based on average credit card balance.

StateAverage credit card balanceAverage # of open credit card tradelinesAverage credit limitAverage Credit Utilization
District of Columbia$16,9677$24,102121%
Arkansas$12,9899$28,79183%
Tennessee$13,8229$27,26182%
New Mexico$11,8608$25,73182%
Kentucky$12,8348$26,15681%

The statistics are based on all debt relief seekers with a credit card balance over $0.

Are you starting to navigate your finances? Or planning for your retirement? These insights can help you make informed choices. They can help you work toward financial stability and security.

Support for a Brighter Future

No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.

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Frequently Asked Questions

How much money do you need to retire?

That depends on several factors, like your life expectancy and the type of lifestyle you want in retirement. Most people will need over $500,000, and some will need well over $1 million. But you may not have to do it all alone. You may qualify for Social Security benefits, for example, that will help you cover some retirement costs.

What is the $1,000 a month rule for retirement?

The $1,000 a month rule is one way that people estimate how much they need to save for retirement. It says that for every $1,000 you want to spend per month in retirement, you need to save $240,000. For example, if you need to spend $3,000 per month in retirement, your retirement savings target would be $720,000.

How much should you save per month for retirement?

Your monthly savings goal depends on your overall retirement savings goal. Saving 15% of your income is often considered ideal, but it's fine to start smaller. What's more important is that you set aside a regular amount every month if you can.