In the US, retirement savings is typically something that individuals need to plan for and save for on their own. Instead of having a single pension plan in place, many Americans rely on a combination of benefits, plans, and accounts for their retirement plans - leaving the exact figure of ‘how much will I retire with’ extremely subjective.
Here, Moneyzine.com has analyzed the landscape of retirement savings across industries. We've included the average pension pay out for jobs that do have traditional pension plans, plus some information about retirement savings in general in the US.
“The below findings only highlight how diverse retirement planning can be in the US, with very few clear figures to show to non-retirees who may not be prioritizing their retirement at this point in time. With an estimated 1 in 4 non-retired adults having no retirement savings to their name, it’s clear that more transparency and education is needed on this issue across all industries.”Jonathan Merry, CEO of Moneyzine.com
Average annual pension by job
It’s important to note that for many, a traditional pension plan is just a small portion of their overall retirement funds. Government jobs are most likely to have a high paying pension plan, whereas private sector industries are more likely to have 401(k) schemes, which we’ve address in the next section.
Police Officers: $57,370 per annum
According to data from Glassdoor, the average annual income for retired police officers is $57,370 - the highest pension pot out of any other jobs that tend to receive a traditional pension upon retirement.
However, many New Yorkers will also remember the scandal a few years ago which revealed that dozens of NYPD officers were collecting annual pensions over $200,000, with one retired officer collecting a pension of over $500,000 per year!
Federal government employees: $26,734 per annum
Next up, according to Pension Rights, federal government employees receive a median pension income of $25,734 per year.
Federal government employees are individuals working for the federal government, such as politicians, judges, public health civilians, and others working in government jobs. This pension is likely to be just a contribution to much larger retirement plans for many of these individuals.
State government employees: $22,860 per annum
The same source states that state government employees have a median annual pension of $22,860.
These employees are any individual employed by an agency in a branch of state government - so similar to the above section, but at a state level rather than a federal level.
Military personnel: $22,658
Pension Rights estimated the current annual pension for military personnel to be $22,658 - just slightly less than state government employees.
Military personnel includes anyone in the military, including veterans, members of the armed forces, and other paramilitary units.
What’s the average retirement saving?
The Employee Benefit Research Institute surveyed American retirees between the ages of 62 and 75 in 2022. The report found that the majority of respondents (23%) had between $500,000 and $1,999,999 in existing financial assets. For 7 in 10 respondents, social security was a major source of their retirement income. Just 35% of respondents said a traditional pension was a major source of income.
Other research has shown that the average private pension in the United States is around $10,788 annually per person - demonstrating just how much other means of income need to be relied upon for the vast majority of individuals.
Overall Retirement Savings
Retirement savings have long been a concern for Americans, with many wondering if they will have enough to live comfortably in their later years. Several recent reports shed light on the state of retirement savings in the US, with some interesting findings.
Due to the multitudinous nature of retirement savings funds and plans in the US, however, it is difficult to paint a clear picture of the overall landscape - here, we’ve compiled numerous studies to find a broader overview of retirement savings in America.
Industries with the Highest Average Retirement Savings
While police officers may have the highest average pension pot, that’s nowhere near the highest average overall retirement savings from the combination of funds that many individuals pay into.
Healthcare professionals have the highest average retirement savings at $860,176, followed by government employees at $710,418, according to the Schroders Retirement Survey 2022. Similarly, the "Retirement Survey Insights 2022" report by Goldman Sachs Asset Management found that healthcare and pharmaceutical professionals have the highest average retirement savings at $1.8 million, followed by finance professionals at $1.3 million.
Average 401(k) Savings By Industry
A report from Vanguard - How America Saves 2022— provided examination of retirement plan data from 5 million defined contribution (DC) plan participants across Vanguard’s recordkeeping business. Here, we can see the average 401(k) balance by industry:
| Industry | Average | Median |
| Agriculture, mining, construction | $190,181 | $46,954 |
| Finance, insurance, and real estate | $177,417 | $53,927 |
| Media, entertainment, and leisure | $173,818 | $71,586 |
| Business, professional, and non-profit | $166,893 | $40,994 |
| Manufacturing | $150,825 | $42,025 |
| Transportation, utilities, and communications | $111,404 | $22,699 |
| Education and health | $106,928 | $26,418 |
| Wholesale and retail trade | $94,689 | $16,319 |
Average Retirement Savings by Age Group
According to that same Schroders report, the average retirement savings in the US is $496,344. Baby boomers have the highest average retirement savings of $708,125, while Gen X has an average of $415,828, and Millennials have an average of $198,634. This is likely due to the fact that baby boomers have had significantly more time to build up their savings.
Retirement Savings and Confidence
While some Americans are on track with their retirement savings, others are struggling. The 2022 Report on the Economic Well-Being of U.S. Households in 2021 - Retirement" by the Federal Reserve found that 41% of non-retired adults reported that their retirement savings were on track, while 37% reported that they were not on track, and 22% were unsure.
Additionally, many non-retirees who are not currently saving for retirement reported that they do not have enough money to do so or are prioritizing other financial goals.
Impact of COVID-19 on Retirement Savings
The COVID-19 pandemic may seem a distant memory for some, but there’s no doubt that it has impacted retirement plans for many Americans, according to the Federal Reserve report.
57% of respondents said that it has affected their retirement savings, and 47% reported that it has caused them to rethink their retirement plans. However, the Goldman Sachs report mentioned earlier found that 60% of respondents reported that they have increased their retirement savings contributions in the past year, so the true picture is still unclear.
Confidence in Retirement Plans
Many Americans lack confidence in their retirement plans, according to the Goldman Sachs Asset Management report. Only 25% of respondents reported that they are very confident in their ability to achieve their retirement savings goals.
In conclusion, retirement savings continue to be a concern for many Americans, with some struggling to save enough while others are on track. However, the reports discussed here provide valuable insights into the state of retirement savings in the US and the factors that impact it.
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