Most Americans are not where they should be in terms of savings for retirement. The situation is actually dire for many of them. Still, there's some good news: The average balance of Americans' 401(k) accounts hit a record high at the end of 2017.

That's good, but it's not good enough. Here's a closer look at how people are faring in their savings, along with some ways that you can vastly improve your financial security.

three eggs, on which are written Roth, IRA, and 401k, are sitting on a surface covered with hundred dollar bills

Image source: Getty Images.

The bad news: We haven't saved enough

When I say that many Americans are behind in their retirement savings, I mean they're really behind.

According to the 2017 Retirement Confidence Survey, about 24% of workers -- and, alarmingly, a hefty 21% of retirees -- said they had less than $1,000 saved for retirement. A whopping 55% of workers and 38% of retirees had less than $50,000:

Amount Saved for Retirement

Percentage of Workers

Percent of Retirees

Less than $1,000



$1,000 to $9,999



$10,000 to $24,999



$25,000 to $49,999



$50,000 to $99,999



$100,000 to $249,999



$250,000 or more



Data source: 2017 Retirement Confidence Survey. 

It's good for those with $250,000 or more that they have that much, but they probably want to have a lot more. Having $250,000 in your coffers won't take you too far in retirement -- and even, say, $400,000 can be too little. After all, if you plan to withdraw 4% annually from your nest egg for retirement income, you'll only get $16,000 per year from a $400,000 war chest and $10,000 from a $250,000 one.

The good news: Savings are growing

The news that savings accounts are growing and hit a record level comes from none other than Fidelity Investments, which serves 26 million customers who have $6.2 trillion in total assets (as of the end of June). Specifically, Fidelity noted that thanks to contributions that have been increasing in size as well as a strong stock market performance recently, both IRA and 401(k) accounts have hit record high average balances as of the end of 2017:


Average at End of 2017

Average at End of 2016

Percent Increase









Data source: Fidelity Investments. 

Fidelity offered even more encouraging words: Those customers who had been contributing to 401(k) accounts for 10 or 15 consecutive years had even bigger balances:


Average at End of 2017

Average at End of 2016

Percent Increase

401(k) -- 10 Years




401(k) -- 15 Years




Data source: Fidelity Investments. 

Of course, context is important here. After all, if the stock market had surged by 38% in 2017, the growth above wouldn't be so impressive. In actuality, the market, as measured by the S&P 500, gained nearly 22% in 2017. And if you're thinking that the accounts above are probably far thinner due to the recent pullback in the market, know that as of this writing (February 13, 2018), the S&P 500 was down less than one percentage point for the year 2018. Yes, there were some big drops in February, but there have been a lot of gains, too.

Don't expect gains in IRAs and 401(k)s to necessarily track the returns of the S&P 500, either, because many people hold investments in bonds, in individual stocks, and in funds other than broad market funds. Some gains in account size are due simply to more money being added by account holders. Other gains are appreciation in the value of various holdings. Fidelity noted an increase in the average contribution rate, too, with about 30% of 401(k) account holders beefing up their contributions, which averaged 8.6% overall in the fourth quarter of 2017, up from 8.4% a year earlier. IRA account contributions rose, too, from $1,590 to $1,730. Those increases are both promising, but note that the contribution limit for 401(k) accounts is $18,500 for the 2018 tax year, plus $6,000 if you're 50 or older. IRA contribution limits for the 2017 and 2018 tax years are the same -- $5,500 -- with people aged 50 and older allowed an extra $1,000 contribution, giving them a maximum of $6,500 for the year.

Most savers could save much more. The table below shows just how powerful it can be to sock away significant sums regularly over long periods:

Growing at 8% For:

$10,000 Invested Annually

$15,000 Invested Annually

$18,000 Invested Annually

10 years




15 years




20 years




25 years


$1.2 million

$1.4 million

30 years

$1.2 million

$1.8 million

$2.2 million

Data source: author.

What to do to improve your financial security

Whether you've saved more or less than the average retirement account holder, if you want to make your financial future even more secure, you can. Obviously, you can try to contribute more each year to your retirement accounts, as well as regular, taxable accounts. You might delay retiring for a few years, too, if need be, and if you're able to.

Consider tactics such as putting your raises directly into your savings, so that you keep living on the same income for several years. Taking a second job for a while can beef up your coffers, too. 

Be sure to include Social Security in your retirement plans, too, as it will likely provide a significant chunk of your income. Once you have an idea how much you can expect from it, you can work to build up the rest of the income you'll need. With good planning and discipline, you may even be able to retire early!