This is from a survey of only 240 people from WalletHub August 2026, but still, the results are not optimistic.
For example, 43% of those surveyed believe it is not realistic for the average American to expect to retire comfortably. “Not realistic?” How do HD readers feel about that?
- Pension preference: 7 in 10 people believe a pension is better than a 401(k). Understandable, but for most workers this is not practical because you need to be a participant in a pension plan (generally one employer) for decades to generate a significant retirement income and the average tenure with one employer is only 4-6 years +-
- Americans worry about retirement: More than 1 in 3 Americans are not confident that they will have enough money to retire.
- Benefit trade-off: More than half of Americans say they would prefer to pay a 12.4% Social Security tax to get double the benefits rather than a 6.2% tax and current benefits. The thing is, that won’t work. Even doubling the entire current 12.4% rate (to 24.8%) would still leave a large gap relative to doubling costs.
- Retirement doubt: 43% of people believe it is not realistic for the average American to expect to retire comfortably. I guess the key word is comfortably and how defined.
- Many people may never retire: 40% of people say they expect to work until they die.
- Debt takes precedence: More than 2 in 5 Americans think paying off debt is more important than making retirement contributions. I wonder.
Note: Percentages may not total 100% due to rounding.
Did you just log in? If you don't see the commenting form, please refresh the page.
Well, don’t be average. That’s why we have Humble Dollar – to show us the way.
To me, it is only bleak, if you do not prepare. You make choices, and most people live for today, not when they are 65 to 90 years old in retirement. That may work for some, but for most not so much.
Dick: Given that 55-65% of Americans describe themselves as living paycheck to paycheck, the 43% estimate of retirement security may be low. Traditional pensions are almost extinct and 401K plans only help if you have sufficient means to contribute. Thus, in order to save for retirement, you have to have disposable income: income beyond what it costs you to live that can be saved and invested for the future. If, in fact, a large majority of Americans are living paycheck to paycheck, it should hardly be surprising that so many do not expect to retire comfortably – or retire at all.
One of my sons and his wife view themselves as living paycheck tp paycheck but they do contribute enough to their retirement plan each month to get their employers match. I have no idea if they are saving enough to have a comfortable retirement. However, my point is simply that we shouldn’t assume that everyone who says they are living paycheck to paycheck isn’t also putting money into a retirement plan.
I was going to leave a new comment, but decided not to be redundant. I’ll add a little to the comment which describes the problem succintly.
We have retirement investments because we started without debt and because we had sufficient income to max out our 403(b) plans. We also had top tier medical insurance through our jobs.
The statistics show that we are unusual.
How do I feel about this? I am glad for me, but I don’t think it is fair that we don’t have better minimal support for people.
Dick,
I live in community where many folks come from families that have never had a retiree, except for the small percentage that had worked in government or for a large corporation, particularly one with a government franchise. Yet, for those working today, the low-cost index fund has made amassing wealth a real possibility for many–maybe most–people. But, as you know, there’s a sad lack of knowledge and helpful behaviors that keep too many from achieving what is within their reach.
I feel really blessed to have both SS and a pension (non COLA). It is sad to hear the pessimism so many people have with retirement.
I found the following Gallup article which finds that retirees are more financially comfortable than nonretirees expect to be and that the expectations vs. reality gap is persistent over time. Interesting read.
Why Americans Are Pleasantly Surprised in Retirement
Reasons given for the gap are 1.) lower expenses after retirement, 2.) Medicare covering more than expected, 3.) Social Security being far more important than nonretirees assume and, 4.) the lack of confidence in Social Security that nonretirees exhibit. [Summarized by Copilot].
There is also a PDF at the end of the article showing the questions asked and the answer trends going back to 2002.
Medicare gap insurance for a couple is about $10,000 a year, almost 40% of the average Americans SS benefit. Medicare Advantage may have low to no premiums, but you get from them what you pay for.
General Averages by Beneficiary Type
That seems high for Medigap . I live in a high cost state and my husband and I pay about 7, 000 a year for both Medigap and an excellent prescription plan since he is on several expensive medications
Medigap is not bad compared to paying IRMAA. You’re looking at an additional $6400 a year just for one retiree.
Yeah, if the couple has income of a quarter million or so a year. The median household income for age 65 plus is about $59,000.
My calculations say married filing jointly in 2024 with MAGI of $250k would be in the 1.4x IRMAA bracket. Part B would be about $974 more per person per year in 2026 ($202.90*12*0.4).
That’s a bit high for most Medigap premiums. The average is around $200 a month per person. My wife and I pay age related premiums which are high at $330 a month which is still “only” $7020 a year.
I agree with this. Even are factoring in the reasons people gave in the Gallup article, I found we were better off than I expected. I have heard that from other retirees as well.
I am definitely better off than I expected. My net worth is far higher than when I retired from the military in 2009, and in the interim, we put 4 kids through college. Why? Well, asset prices have inflated due, in part, to low interest rates and expansion of the money supply disproportionally helping those with financial assets. My expenses every month are now much lower than the past as the kids are all self sufficient. I feel very fortunate.
I must say I’d trust my 401(k) a lot more than a pension. I only qualified for a pension with one company, which I left 25 years ago. They offered a cash payout at some point, and I took it.
My father had a great pension after working at his company for 25 years. After he retired, the company was bought by a much larger conglomerate, and their lawyers immediately tried to shred the pension plan.
It ended up going to court, and my father retained his pension, but it was reduced from the previous amount (I don’t have the details).
At least with a 401(k), Roth IRA, etc, if I screw it up it’s on me.
They could only do that if the plan was underfunded when it was terminated.
I don’t know the details. It was an Irish company taken over by a French company.
The French companies seem to only care about their own citizens based on experience in the pharmaceutical business in the U.S. They only lay off the Americans.
It’s probably nothing to do with caring. France doesn’t have “at will” employment. It’s just much, much easier to terminate the employment of staff in a US division of a French business.
If this wasn’t in the US my comment doesn’t apply
Look at the source of the pension – Is it coming from a small rust belt school district that is teetering on insolvency or the federal government? Does it have a COLA? Is it orchestrated by Congress, who has an interest in seeing it survive?
Would have to see the demographics of that small sample size before a placed a whole lot of stock in that survey.
Not specifically related to the survey, but my understanding is that 401K or similar retirement funds are often not available to people working for small businesses? This seems to be a huge gap in retirement funding for Americans
As someone that has always worked for small to medium employers, this would have left me to work it out on my own. Not sure that as a young man I would have had the foresight to start my own retirement savings. Fortunately for me, here in Australia we have a compulsory scheme for all employees, regardless of employer size or type.
They “could” be available, but often a small employer doesn’t think it worth setting up. For myself, a schedule C business owner. I didn’t realize all the options available to me in my early years (with conversations when income is low. Section 121 medical plan, solo 401k for my wife and I, etc) so I missed out.
My son encouraged his employer (4 employees) to setup a 401k (including a Roth option) which he initially thought it would be hard, but then discovered it is trivial. I don’t know of any reason for an employer to not set it up.
And for sole proprietors with money to pay aside, you can max out two spouse 401ks plus a 25% employer donation, which has made a huge difference towards our retirement possibilities.
Greg, thanks for your interest in the American worker! You’re right, the opportunities for retirement savings are better for employees at large businesses and other employers. Still, workers elsewhere can make significant tax-advantaged contributions as well. Small businesses can offer a SIMPLE IRA, and anyone who earns income can save money in either a traditional or Roth IRA. Meanwhile, a spouse can invest in an IRA even if he or she does not earn an income. And those with a Health Savings Account can save and invest money that is never taxed to pay for medical expenses.
And let’s not forget the value of saving money in a regular investment account. There’s no protection from regular income taxes, but the capitol gains tax rates are very favorable.
I am not a statistician or someone who thinks up surveys, but it seems to me that a survey with only 240 responses isn’t really serious? Wouldn’t you need many more responses to be taken seriously? I hope someone who worked in this field might respond. Chris
Per AI:
The maximum margin of error for a survey of 240 persons is approximately 6.33% at the standard 95% confidence level
yes, but this could be a self-selecting 240. MUCH bigger margin of error.
I would think so, but it didn’t stop them from publishing it. I bet some people take it very seriously, statistically valid or not. Of course, that seems quite popular these days.
I presume they are some personal finance adjacent business and thus publishing it stimulates traffic when it gets picked up in news feeds etc. Not everything published is an in-depth Pullitzer worthy peer acclaimed study.
I would suspect that the results look similar to any similar study since the passing of the company pension and long job tenure period in US. Like it or not you live in the biggest consumerist society in the world and people spend like they are winners even when they are not (and others have no choice because of the nature of extractive pricing). So up to 40-50% fearing for a comfortable retirement sounds entirely plausible.
I was surprised to learn that the average job tenure has changed very little over the years. It was 3.5 years in 1982 and 3.9 in 2024. The median has been around 5 years for over 40 years.
That’s why I say the impact of pensions was not as great as it may appear, but of course there are exceptions in a few industries.
The mean average will never be high because of the prevalence of high turnover service sector jobs in the economy e.g. kids flipping burgers.
Median is more meaningful – that means 50% of workers have >5 years tenure. Is is reasonable for them to want vested pension schemes? I’d say so.
It’s reasonable for anyone to want a pension, but pensions are designed to consider years of service and generally highest 3 to 5 years average earnings which most often occur near the end of service. They are back loaded. Five years or even ten years will generate a modest pension.
Even the generous federal pension provides $1436 a month to a member of Congress after ten years of federal service at $174,000 a year salary, but they can’t collect until age 62.
If they ran this survey in August 1986 I bet the results would’ve been the same. Back then I remember many boomers were saying they would never be able to retire.
You get what you put into it and by that I mean personal financial education. hardly any in schools so don’t expect rosy results when you do a survey.
I do wonder when Americans actually had a “secure” retirement. It’s largely a myth, propagated by politicians and those who profit from the complexity. In reality, the typical retiree is more like a wildebeest crossing the Serengeti. Good luck getting to the other side!
There was probably a sweet spot in the 1980s and 90s for people with good pensions, Social Security and Medicare, but that was hardly everyone.
What has clearly changed is who bears the risk. Today it’s basically: “Here’s your 401(k). Now save enough, invest it for 40 years, survive a few crashes, and figure out how long you’re going to live!”
The .peak of Americans with a pension was in the 1970s at around 50% +- mostly in very large companies and heavily unionized industries. So retirement must have existed in another form for half of Americans. How comfortable is the question.
Nearly 90% of the public sector still provides pensions, a bit ironic considering those without a pension are funding them.
Overall, about 60% of employers offer a 401k, but that is skewed by size of the employer. It’s only around 35% for small employers (under 100 employees).
The real myth as I mentioned in the post is that a pension always has value in the workplace. Few workers today are staying with one plan sponsor for nearly 50 years as I did or even 25-30 years. Pension value is based on longevity. Equally significant is that employers have drastically reduced or eliminated health insurance coverage for retirees, making retirement before 65 more difficult.
My parents lived on Social Security alone, but that was only “comfortable” because they shared a home with my sister’s family.
There is no need to feel anything about this. It is simply a survey recording individuals’ own feelings. I sense from some of your additional italicised points you’re already trying to question whether people are lying or wanting the impossible.
That you think something is impossible is not a response to a feeling someone has that it is something they would prefer.
Few things are absolutely impossible. Politics, corporate behaviour, the traditional US culture of at will firing and job insecurity etc could all be changed if enough people had the will. Hey even unlinking social security from a prefunded basis is only the work of a single Act.