Pure’s Principal, Marc Horner, CFP®, explains what the average retirement savings data means, why the rules of thumb fall short, and, most importantly, the three-step framework that sets you up for success.
Transcript
Are you on track? According to your age, how much money should be in your retirement savings? Well, the big boys like Fidelity, Eddie Jones, or Fisher would like to cram you into some category. Either you’re a prolific saver or a woeful underachiever. It’s no wonder when people see these arbitrary numbers, they think, “Yee-haw, I’m set,” or, “Honey, we’re gonna have to move back in with the kids.”
With these numbers, there’s a lot going on behind the scenes that the big boys don’t want you to know or maybe don’t have the time to tell you. Well, today, we’re gonna let you in on it, and once you understand it, everything’s gonna change. You’re gonna be able to start building towards a real number tailored to your retirement.
The average American aged 55 to 64 has a little over 500 grand saved for retirement.1 But the median, the number that reflects what most households actually have, is less than 200.1 And that same data shows that more than half of American households have zero in retirement savings.1 Zero. Zip. Nothing. So what’s up with that gap?
Well, the average is being pulled up by the uber-rich at the top, while half the country has nothing at the bottom. That means the benchmark most people are measuring themselves against is not reality. It’s some kind of math mirage. And just like the mirage of an oasis in the desert that gets people to drink sand, this math mirage can lead people to make retirement decisions that end up evaporating in front of their eyes.
By the end of this video, you’re gonna know if your retirement savings are on track. But first, you need to know exactly what the data means, why the rules of thumb fall short, and most importantly, the three-step framework that sets you up for success. So stay tuned for that last part ’cause that’s where this stuff gets real.
So Fidelity tracks 401(k) balances across over twenty-four million plan participants, and their fourth quarter 2024 data shows that the average baby boomer has got about two hundred and fifty grand in their 401 and the average Gen X-er has less than two hundred thousand.2 Now, look at those numbers carefully. If you’re sixty years old and have about two hundred and fifty grand in your 401, Fidelity data says you’re right around average.
But we already established in the intro what that average actually represents. It only counts people who are actively participating in a 401. It excludes the fifty-four percent of households with no retirement savings at all. So the peer group you’re being compared to is already a self-selected group of active savers, and you’re still only at the midpoint of that group.
The Federal Reserve data tells the same story, just on a bigger scale. The pattern’s identical. The average overstates where most people actually are. So when someone reads a headline and feels reassured or feels behind, they’re reacting to a number that was never designed to answer the question they’re really looking for, and that’s what we’re gonna get into today.
But before we get into the data, I know what some of you are already thinking. “Yeah, this is interesting, but does this actually apply to my situation? Am I behind? Am I further ahead than I think?” Well, that’s exactly what our free assessment is for. So if you’d rather just get straight to the answers than watch this full video, you are not gonna hurt my feelings.
Click the link below for a free retirement review. No pitch, no pressure, just an honest look at your numbers and a clear path forward. Okay, for the rest of us, back to the numbers. Now, Fidelity does offer a framework to help you gauge whether you’re on track. Their savings multipliers say you should have one times your salary by age 30, three times by 40, six times by 50, seven times by 55, eight times by 60, and 10 times by age 67.2
On the surface, clean and simple, and for a lot of people, that’s appealing. But there are five things these multipliers don’t account for, and each one can meaningfully change whether your plan actually holds. So number one, the multipliers are calibrated to a specific set of assumptions. Fidelity built theirs assuming a 15% savings rate, retiring at age 67, and a target of replacing 45% of your pre-retirement income.
If your situation differs from any of those three inputs, and most of ours do, the multiplier was never designed for you. Number two, lifestyle differences matter dramatically. $800,000 might fund a 30-year retirement comfortably in a mid-sized Midwestern city. You try that in San Francisco or New York, and that same balance could be gone in less than a decade.
Three, healthcare is the wild card nobody really accounts for. Fidelity’s 2025 estimate puts the average individual healthcare cost in retirement at around 170 grand, and that’s just for Medicare premiums and out-of-pocket expenses, not long-term care.3 That’s a six-figure variable sitting outside the multiplier entirely.
Number four, inflation and taxes. A multiplier doesn’t adjust for your state’s tax treatment of retirement income, your specific withdrawal strategy, or what two or three decades of inflation does to your purchasing power. And those variables can alter your plan by hundreds of thousands of dollars over a full retirement.
Number five, sequence of returns risk. If a significant market decline hits in the first few years of retirement and your portfolio is not structured to absorb it, the damage compounds in ways no multiplier can anticipate. Rules of thumb are a starting point, but they’re never meant to be a finish line.
And if you’ve been measuring yourself against one, the next question isn’t whether you’ve hit the number. It’s whether the number even mattered for you at all. So what actually happens when people make decisions based on these numbers? The first could be retiring too early because you hit the benchmark.
You’ve reached eight times your income, so you assume you’re set, and you pull the trigger. But without a plan built around your actual numbers, you could run out of money in your late seventies or eighties with no real path back to work. The second mistake is staying too long because you’re below the benchmark.
We’ve seen people delay retirement for years, and sometimes completely unnecessarily, because they felt behind based on some random number that had nothing to do with their actual situation. They had enough; they just didn’t know it, and those were the years of travel, time with grandkids, and freedom that you don’t get back.
I had a client who was sixty-two, below the Fidelity multiplier for her age, and had convinced herself she needed to work until age sixty-eight. But when we ran her actual numbers- her spending, her mortgage payoff date, her Social Security projections, her pension- she could retire at sixty-three comfortably.
The benchmark had her working an extra five years for no reason at all. The averages, they just can’t see her particular situation. The multiplier can’t see it either. What she needed, and what actually changed her decision, was a framework built around her specific numbers. So that’s what we’re gonna walk through next.
Instead of asking, “Am I above or below some average?” ask three better questions. So we call this lifestyle gap analysis. Step one: What will you actually spend each month in retirement? Not a guess, a real number. Housing, food, travel, healthcare, insurance, taxes. This is the part most people dread- me too- and most people get it wrong.
The most common mistake is projecting retirement spending based on current working expenses without accounting for what changes in retirement. Your number needs to reflect your actual retirement lifestyle, not a scaled-down version of your working life. Step two: What guaranteed income do I have? Social Security, pension, rental income, annuities.
Factor in how those sources are gonna be taxed. For most people, up to eighty-five percent of Social Security benefits are taxable depending on their combined income, which means your gross Social Security number and your net number, they can be meaningfully different.4 That difference belongs in your plan.
Step three: Does your savings reliably cover the gap? So you take your monthly spending, subtract your guaranteed income, and what’s left, that’s the gap your portfolio needs to fill. From there, you can stress test whether your savings can sustain that withdrawal for twenty-five or thirty years, and not just under average market conditions, but under bad ones too.
What happens if returns are below average in the first five years? What happens if inflation runs higher than expected? What happens if I live to age ninety-two? So if you’ve been measuring yourself against some random benchmark, what does that number actually tell you about whether your specific plan works?
Averages will tell you where most people are. They’ll never tell you where you need to be. Those are two totally different questions. Confusing them is one of the most costly planning mistakes you can make. So you now have a framework that actually answers the right questions: your spending, your guaranteed income, your gap.
You run those three numbers honestly, and you’re gonna know more about retirement readiness than any big company benchmark is gonna tell you. But if you want a second set of eyes on your numbers, someone to really stress test your plan against the scenarios that matter, we’re here to help. Click the link in the description of this video to learn about how you can take advantage of our free retirement review.
Takes just a few minutes, and there’s no obligation, and you’re gonna walk away with a clear picture of where you actually stand. The people who feel most confident going into retirement aren’t the ones who hit some arbitrary big company benchmark. They’re the ones who ran their own analysis, stress-tested it honestly, and then made a decision based on what they actually learned.
That is the difference between guessing and knowing.
Sources
1. Kiplinger. “The Average Retirement Savings by Age.” April 21, 2026.
2. Fidelity. “How do your retirement savings stack up?” March 3, 2025.
3. Fidelity. “Fidelity Investments® Releases 2025 Retiree Health Care Cost Estimate, a Timely Reminder for All Generations to Begin Planning.” July 30, 2025.
4. IRS. “Publication 915: Social Security and Equivalent Railroad Retirement Benefits.” November 18, 2025.
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