U.S. Retirement Savings and Income Gaps Widen

Americans in their 50s need a median net worth of $247,200 to $409,900 to be considered middle class, according to Federal Reserve data, though wealth at the top skews the mean higher. For retirement, many aim for $1.6 million in savings, but retirees typically spend about $5,400 per month on essentials like housing, healthcare, and transportation. Social Security remains a crucial income source, with the average 70-year-old receiving $2,148 monthly, while the maximum benefit in 2025 will be $5,108. The 4% withdrawal rule suggests $500,000 in savings would yield about $1,667 per month, illustrating a gap between ideal and actual retirement income. Inflation and rising living costs are major concerns, and only 34% of 401(k) savers feel confident about reaching retirement goals, though most continue contributions by cutting other expenses. The data highlights the financial challenges and planning needed for a secure retirement.