A Crisis Is Looming Large as Nearly 50% of Americans Are Entering Retirement With Nothing Saved

For a lot of workers, retirement is the light at the end of the tunnel. You finally get to clock out, kick your feet up, and stop worrying about money. At least that’s the dream, right? But for an increasing number of Americans, that dream just isn’t looking attainable anymore.

According to new data from NFP, 46% of workers now have either deprioritized retirement savings or stopped saving entirely. Bearing that in mind, it’s hardly surprising that 72% of people say they’re off track for retirement.

That’s not terrifying if you’re in your 20s and have decades to catch up. But a similar analysis from the Federal Reserve’s Survey of Consumer Finances (SCF) has shown that 46% of Americans have currently got nothing saved for retirement. If you’ve already hit middle age and this is sounding familiar, you may be running out of time here.

The underlying problem behind these stats is a lot more complicated than just assuming half of all Americans are about to get pushed into retirement with $0 in the bank. As with any big economic study, there are caveats all over the place. Even so, there’s a lot to be said here about how this cost of living crisis has impacted retirement savings and the dismal state of America’s social safety net.

A Perfect Storm of Rising Costs and Financial Illiteracy

The scoreboard doesn’t lie. In the 2026 NFP U.S. Retirement Trend Report, almost half of all employees surveyed told researchers they were either deprioritizing retirement or are unable to save. Rising housing and healthcare costs, car payments, and other everyday expenses were all flagged as primary culprits. 

None of this is surprising when you look at what’s happened to household budgets over the past couple of years. Housing costs have been on an upward trajectory, health insurance premiums have shot up, and credit card balances are rising too. When you’ve got all of these bills to pay in the here and now, it’s tempting to give up saving for something you won’t need for another 20 or 30 years. 

But the NFP’s report also points to a major financial literacy problem. People aren’t refusing to save because they’ve decided it’s unimportant. A growing number admit they simply don’t know what they should be saving, whether they’re on track, or even who to ask for help.

Only 42% of people say they understand the retirement services available through their employer, and only about a third know how to use the services that are there. That’s a drop of more than 10% year-on-year (YoY), and there’s also a disconnect between wanting help and actually getting it. 

People aren’t ignoring retirement because they don’t care. Numerous Americans just don’t know what to do, and that issue only gets scarier as you get older.

The NFP’s study found 41% of employees aged 55 and older expect Social Security to be their primary source of retirement income after they retire. But in this political climate, that’s a risky basket to put your eggs in.

Social Security was never designed to replace your entire monthly salary. That’s part of the reason experts are projecting the trust fund will be depleted by 2033. Unless legislative changes are enacted in the next couple of years, people who are relying on that Social Security money are only going to get about 77% of their scheduled benefits moving forward.

That doesn’t mean Social Security is going away, and it doesn’t mean you should assume you’ll receive nothing from the state. But it does mean you’ve got to start building your own savings now. And while there isn’t some magical investment that can instantly correct decades of inadequate savings, there are still positive steps you can take to get back on track.

What Can You Actually Do to Get Back on Track?

First thing’s first: If reading all of these numbers makes you nervous, it sounds like you need to sit down and take stock of your current situation. 

Figure out what you’ve got, what you’re paying in, where your balances are sitting, and what opportunities your employer might offer that you’re not taking advantage of. If your company offers an employer match, take it. Turning down matching contributions is pretty much the same as just leaving part of your salary on the table.

Your next step should be to automate any contribution that's being made. It’s always easier to save when the money never reaches your checking account in the first place, and increasing a 401(k) contribution by one or two points can make a big difference without feeling like a massive blow to your monthly income.

The current 401(k) limit is $24,500 if you’re under 50. Over-50s get an extra $8,000 catch-up allowance, and over-60s can qualify for a “super” catch-up contribution of $35,750. With how expensive life is at the moment, you’re probably not in danger of hitting that number and that’s okay. But you should aim to maintain a consistent contribution that goes as high as you can realistically afford.

It’s also never too late to set up an IRA. That being said, the most overlooked part of a retirement strategy is often managing pre-retirement debt effectively. 

Your pension should be a top priority, but high-interest credit card debts and loans can overwhelm even the most sensible investment strategy. It’s tempting to dip into a retirement account when the car breaks down or the roof starts leaking, but you won’t be thanking yourself later. So, ensure you’re staying on top of credit obligations and maintaining a rainy day fund to protect your retirement savings. That's just as important as ramping up your contributions, otherwise you'll just keep skimming off the top and kicking yourself about it later. Without a decent savings account, it's a tough cycle to break.

None of this stuff is particularly cool or glamorous. But it’s a lot more useful and effective than trying to make up for 20 years of missed contributions with one rockstar trade.

The bottom line here is that Social Security and a traditional pension are no longer enough to retire comfortably. That places more responsibility on you to build your own individual wealth through 401(k)s, IRAs and other defined-contribution plans. 

None of this is cause to panic, but it should be a call to action. After all, the biggest financial mistake you could make isn’t finding out that you’re currently behind on your savings goals. It’s finding out after you’ve already retired.

On the date of publication, Nash Riggins did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.