Preparing for retirement has never been more critical. As millions approach age 65, understanding the gap between expectations and reality can help you shape a more secure future.

Why Retirement Readiness Matters Now

In 2025, a record 4.2 million Americans turn 65, marking a demographic wave that will reshape household finances for decades. At mid-2025, total U.S. retirement assets were $45.8 trillion, accounting for 34% of all household financial assets.

Yet the enthusiasm reflected in these numbers masks a growing crisis: most workers overestimate their readiness and underestimate the cost of living comfortably after they stop working. Surveys reveal a stark confidence gap between workers and sponsors that leaves many vulnerable to market swings and unexpected expenses.

Retirement Confidence & Behavior

Survey data from 2024–2025 paint a paradoxical picture: workers report high confidence even as objective measures remain precarious. For instance, the EBRI/Greenwald 2025 survey finds

• 67% of workers say they’re confident they’ll have enough to live comfortably.
• 78% of retirees now feel secure, up from 74% the prior year.
• Yet only 27% of retirees claim they’re truly prepared, underscoring hidden vulnerabilities.

Meanwhile, employers view the situation more soberly. A 2025 BlackRock report shows just 38% of plan sponsors believe most employees are on track, even as 100% feel responsible for providing guidance.

Behavioral nudges like auto-enrollment and target-date funds have boosted participation, but they can’t fully close the gap between perceived and actual readiness. Market volatility further erodes confidence: on-track sentiment among workplace savers dipped from 68% to 64% in one year, and concerns about running out of money rose by 10 percentage points.

Perceived Needs vs. Actual Savings

Americans estimate they need roughly $1.26 million to retire comfortably, down from $1.46 million in 2024. In contrast, median savings figures tell a tougher story.

According to Federal Reserve data compiled by Kiplinger:

Median retirement savings for ages 55–64 stand at $185,000. For ages 65–74, the figure is $200,000—far below the six-figure target many envision.

Additional data from NerdWallet highlight stark inequality: the average retirement savings across all families is $333,940, while the median is only $87,000. Among those 75 and older, the average rises to $462,410, but the median remains just $130,000.

This savings gap highlights geographic and demographic disparities. For example, Hawaii and Massachusetts report median savings above $218,000, while many states fall well below the national average.

Access, Participation, and Shortfalls

Access to retirement accounts has improved, yet participation and adequacy remain uneven. Gallup data show 83% of adults with incomes above $100,000 have a retirement plan, but coverage plunges at lower income levels.

More than 56% of Americans believe they are behind on their retirement goals. Among those with defined objectives, 37% say they’re “significantly behind” and another 21% “slightly behind.” Generational participation also varies: only 62% of Gen Z save for retirement compared to 84% of baby boomers.

The gender gap adds another layer of risk. Women hold about 30% less in retirement savings than men, with median balances of $31,291 versus $45,106, respectively. Longer life expectancies, wage disparities, and caregiving breaks exacerbate this shortfall.

Practical Steps to Strengthen Your Plan

While the data may seem daunting, actionable strategies can help you bridge the gap and retire with confidence:

• Maximize contributions to employer plans and IRAs, aiming to increase your savings rate by at least 1% each year.
• Regularly rebalance portfolios to maintain an appropriate risk profile for your age and goals.
• Consider phased or partial retirement options to transition smoothly and manage income needs.
• Leverage Catch-Up Contributions if you’re over 50 to boost your 401(k) and IRA savings.
• Explore annuities or longevity insurance to secure a predictable income stream.

Building Confidence Through Action

True retirement readiness goes beyond survey optimism. It demands a clear plan, disciplined saving, and regular check-ins. Start by creating a personalized retirement budget that factors in healthcare, housing, and leisure.

Next, run projections under various market scenarios to understand potential shortfalls. Work with a financial planner or use reputable tools to stress-test your assumptions.

Embrace the power of small changes: redirect windfalls, tax refunds, or pay raises into retirement accounts. Automate contributions so you never miss a deposit. And track your progress annually, adjusting as life evolves.

By addressing the confidence vs. reality gap head-on and taking incremental steps today, you can transform uncertainty into assurance. Your golden years deserve more than hope; they require preparation.

Begin now, stay informed, and let each smart decision bring you closer to a retirement filled with freedom, purpose, and peace of mind.