Understanding Pre-Retiree Savings and Financial Security
A recent study by the Transamerica Center for Retirement Studies provides critical insights into pre-retiree savings behaviors and future expectations across the United States. Pre-retirees reported an average retirement account balance of $56,000, yet many felt that $500,000 would be necessary for a comfortable retirement. Interestingly, the survey reveals that two-thirds of adults remain optimistic about retiring comfortably, a consistent trend since 2020.
The report, titled "Life and Money: Retirement Security in the USA," offers a retrospective analysis based on the last six annual surveys by Transamerica. Findings show a growing confidence in retirement savings, with 59% of participants in 2025 feeling assured about their financial future, up from 55% in 2020. Similarly, retirees exhibiting confidence increased to 69% in 2025 from 65% in 2020.
Despite this optimism, the study highlights a notable disparity between anticipated and actual retirement savings. By 2025, 62% of pre-retiree respondents admitted to an inadequate savings rate to fulfill their retirement needs, emphasizing the need for strategic retirement planning.
Retirement Savings Vehicles and Trends
In 2025, 69% of respondents participated in workplace retirement plans such as 401(k)s. This included 81% of employed individuals and varied significantly across different employment statuses, indicating the importance of employer support in retirement planning. Among employees, 75% reported access to employee-funded retirement plans, whereas 37% had access to employer-funded options such as defined benefit plans.
Among those contributing to workplace plans, the average contribution rate was 10% of annual salaries. However, contributions varied, with 24% allocating only 1% to 5%. For the self-employed, 76% saved for retirement, though only 41% did so consistently. Additionally, 58% maintained retirement savings outside their employer's plan through alternative financial products.
Financial Planning and Recommendations
Budgeting was a widespread practice among respondents, yet less than half engaged in it consistently. Only 23% had a written retirement strategy, enabling a clear path toward financial goals, while 31% sought guidance from financial advisers. The usage of retirement calculators stood at 13%, highlighting an opportunity for improved financial literacy.
Catherine Collinson, CEO and President of both the Transamerica Institute and TCRS, emphasizes incremental steps in financial planning. She advocates that continuous, small actions can yield substantial long-term benefits, with 87% of participants associating retirement with positive sentiments like "freedom" and "enjoyment."
The report concludes with ten strategic recommendations aimed at improving retirement security among Americans, employers, and policymakers. Detailed demographic reports are anticipated as Transamerica continues its extensive research commitment, marking their 26th annual survey conducted by The Harris Poll with over 60,000 participants from 2020 to 2025.