Retirement crisis: Most Americans aren't saving enough, are you?

Despite the fact that about half of Americans are participating in a retirement plan at work, most people are falling behind where contributions are concerned.

That’s according to a study from researchers at Stanford Center on Longevity, which estimated that the majority of American workers aren’t on a path to be able to sustain a full-time retirement by the age of 65.

In order to determine whether people of different age groups were on track to save enough, researchers used a formula from the Boston College Center for Retirement Research to determine what rates each group would need to save at (based on median income) in order to reach a salary replacement rate of 70 percent by the age of 65.

Here’s what those rates look like:

Begin saving at 25: Stash away 10 percent of income

Begin saving at 35: Stash away 15 percent of income

Begin saving at 45: Stash away 27 percent of income

They also used a formula from Aon that suggests individuals need to contribute 17 percent of income – including employer contributions – to retirement plans in order to retire around 65.

The study examined data from people participating in the work-based retirement plans, of which a vast majority of those eligible do.

Overall, families of all ages were saving a median amount of about 6 percent to 8 percent of income – below the level recommended for even the youngest workers.

As a result, most workers are expected to be unable to maintain their standard of living upon full retirement at the age of 65.

“This may be a crisis for those households that are unprepared for a significant drop in family income or aren’t prepared to work beyond age 65,” researchers wrote. “It’s likely many Americans will need to adjust their spending but can nevertheless experience a comfortable retirement.”


Millennials and Generation X workers lagged behind target goals more than individuals belonging to older generations.

Within every age group, workers with higher levels of educational attainment and income were making more contributions to retirement plans.