How much do people on average save up for retirement? Do most retired people have pension plans?

Public Comments

1. very few have company pension plans anymore. most people have to rely on 401k plans they had to contribute to. social security should be no more than half of what you spend. retirement is where we all pay the price for lack of savings.
2. "Average" is too broad for a meaningful answer. For a comfortable retirement you must consider both how much somebody made over their life time and how much they want to spend in retirement. Most people do not have pension plans. The typical savings for someone currently over the age of 65 is something just north of $150,000. But, this overlooks the fact that many people have far more and others far less. It also ignores the very important fact of age: a single person who is 89 and a balance of $150,000 is in much better shape than a couple aged 65 with a $150,000 balance. If you are "used to" spending $25,000 a year, you are married, and both spouses get full SSA benefits, $150,000 (well managed) could easily last more than 15 years. On the other hand, if you are used to living on $45,000 (the average household income in the US), $150,000 might not last very long (6.5 years, on average). People in general tend to fall into three broad groups: non-savers, savers, and super savers. Non savers save less than 1% per year on average over their working lives. They are generally living "paycheck to paycheck." The minority are heavily in debt. The majority simply do not save, on average, enough to pay for any future needs. Problems, opportunities, and life changes tend to wipe out whatever they have saved up to that point and then they have to start all over again. Savers save at least 7% per year on average over their working life. Super savers save more than 20% per year on average over their working life. The generic definition of a super saver is a formula: Take your current annual salary multiply that number by your age and divide the result by 10. If you have at least that much in savings (including retirement savings but not your home equity), you are a super saver. For a 45 year old earning $45,000 a year, you need at least $202,500 in savings so far to count as a super saver. These three groups are roughly equal parts of the population over time...with the savers being the slightly largest group, then the non savers and then the super savers. Most of the millionaires in this country (with liquid net assets of at least $1 million but less than $5.5 million) are retired super savers; meaning that they did not necessary have particularly large incomes over their working lives.
3. You need at least a million or two for a comfortable life. Most workers have a pension plan for their savings because, as a pension plan is tax-favoured, savings can grow faster in the plan than outside it. Not all pensioners have pension plans, because until relatively recently social security pensions provided a reasonable (but not high!) income.