Are Today’s 50-Somethings Better Prepared for Retirement Than 50-Somethings in the Past?
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Key Takeaways
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The share of 50-somethings with retirement accounts rose from 52% in 1989 to 61% in 2022, but progress has been uneven.
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Median retirement balances more than tripled over three decades, though gains were stronger for higher-income households.
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About 30% of 50-somethings had neither a retirement account nor a pension in 2022, complicating the readiness picture.
Millions of Americans in their 50s are entering the final stretch before retiring. They have far more money in retirement accounts than 50-somethings did decades ago, according to the Federal Reserve’s Survey of Consumer Finances. But that doesn’t necessarily mean they’re better prepared.
Retirement Saving Is More Common—But Not by Much
More people in their 50s have money in a retirement account than in the late 1980s, but the increase has been modest—and far from steady. In 1989, 52% of households headed by someone ages 50–59 had retirement account savings. By 2022, that figure stood at 61%, according to the Fed’s data.
This growth shouldn’t come as a surprise and is arguably lackluster given the changes that have occurred over the past 33 years. During that period, employers have moved away from traditional pensions toward 401(k)s, shifting more responsibility for retirement saving onto workers. Federal legislation has also encouraged employers to automatically enroll workers in retirement plans rather than waiting for them to sign up.
Interestingly, participation hasn’t kept climbing despite those changes. The share of 50-somethings with retirement accounts peaked at 67% in 2007, just before the Great Recession and shortly after the first major federal legislation to facilitate automatic enrollment was introduced.
The 2022 percentage is also lower than the levels recorded in 2001 and 1998. In other words, the long-term trend isn’t one of continuous improvement. Retirement account ownership rose considerably through the 1990s and early 2000s, but it has bounced around near 60% since then.
Why This Matters
Today’s 50-somethings have more retirement savings than those in the past, but many also have less pension support and still fall short of common benchmarks. That could mean relying more heavily on Social Security, working longer, or leaning on family in retirement.
Typical Retirement Balances Have Climbed Sharply
Among those who do have retirement savings accounts, balances have grown significantly over three decades. After accounting for inflation, the median balance more than tripled: from about $53,000 in 1989 to $162,000 in 2022.
Two things are immediately clear from the chart. First, the 2022 figure is the highest in the series. Second, the climb hasn’t been steady.
There were noticeable drops from 1992 to 1995, then from 2007 to 2010, and again from 2013 to 2016. The middle decline has an obvious explanation: the 2008 financial crisis and the recession that followed. The other dips, meanwhile, could potentially be the result of new, lower-balance savers entering the pool and pulling down the median.
As for the huge spike from 2019 to 2022, that’s likely due to a buoyant stock market, into which most retirement savings are invested. Combined with pandemic-era stimulus and reduced spending, that left some households with more to save or less reason to draw down their existing accounts.
It’s also worth noting that these gains weren’t evenly shared. Fed research found that retirement account balances rose for higher-income families while failing to keep pace with inflation for families in the bottom half of the income distribution. That means the increase in the median doesn’t necessarily reflect equally strong gains across households.
Moreover, these numbers only reflect those who already have retirement-account assets. If you include all 50-somethings, adding in those with no retirement account at all, the typical balance would be considerably lower.
What These Numbers Really Say About Retirement Readiness
Typical balances among savers are far higher than they were three decades ago. But the share of people saving in the first place has improved far less dramatically, and has even dipped since the mid-2000s.
Part of the reason participation hasn’t grown more could be that some people in this age group still rely on employer-funded pensions. In 2022, 61% of 50-somethings had money in a retirement account, but that share rises to 70% when pensions are also counted.
Even so, that still means roughly 3 in 10 had neither a retirement account nor a pension. They may have other assets or sources of retirement income to draw on, but the figure highlights a sizable gap in traditional retirement resources. And, for those who have saved something, a $162,000 median can still fall well short of commonly cited retirement savings benchmarks, such as Fidelity’s recommended six times salary by 50.
In the end, a clean generational comparison is difficult. Today’s 50-somethings have much larger retirement account balances, but earlier generations were more likely to have traditional pensions providing guaranteed income in retirement.
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