Many Workers Have More in Their Driveway Than in Their Retirement Accounts

A new analysis from the National Institute on Retirement Security (NIRS) highlights a stark reality: For many Americans, their car is worth more than their retirement savings. The comparison lands because it swaps abstract percentages with something tangible—a vehicle sitting in the driveway.

The report, based on U.S. Census data of workers ages 21 to 64, highlights how far typical retirement balances lag behind what experts say workers should aim to accumulate over time.

For Younger Workers, Their Car Is Worth More Than Their Retirement Account

The NIRS analysis compares defined contribution (DC) retirement account balances to the average value of vehicles owned by households in different age groups. The takeaway: For workers ages 21 to 44, their car is worth more.

Retirement assets are designed to grow and compound over decades—particularly in workplace plans like a 401(k). Cars, by contrast, typically lose value over time due to wear and tear.

That’s what makes the comparison so striking: The asset that’s expected to shrink is often larger than the one meant to grow.

No Age Group Is Close to Hitting Common Retirement Benchmarks

NIRS didn’t just look at people who actively participate in retirement plans. Instead, the researchers included all working-age individuals, whether they have a retirement account or not. That approach produces a more comprehensive—and sobering—snapshot than studies that only analyze account holders.

To frame the gap, the report compares actual savings to widely cited age-based benchmarks from Fidelity. These guidelines suggest aiming for savings equal to:

• Age 30: About equal to your annual income
• Age 35: Twice your annual income
• Age 40: Three times your annual income
• Age 45: Four times your annual income
• Age 50: Six times your annual income
• Age 55: Seven times your annual income
• Age 60: Eight times your annual income
• Age 67: 10 times your annual income

These benchmarks are general targets, but they are often used as a rule of thumb for retirement planning. According to Census-based calculations in the NIRS report, workers are nowhere near those targets.

In other words, no age group has reached even one-quarter of the recommended savings levels. For workers in their 40s and 50s—prime earning years—that shortfall is especially concerning. Those years often come with peak expenses: mortgages, childcare, student loans, and even caregiving for aging parents. Retirement contributions can become secondary to immediate financial demands.

In other words, no age group has, on average, reached even one-quarter of the recommended savings levels. For workers in their 40s and 50s—often their peak earning years—the gap is especially concerning. Those years can also bring peak expenses: mortgages, childcare, student loans, and caregiving for aging parents. As a result, retirement contributions often slip behind more immediate financial demands.

How to Start Closing the Retirement Gap

If your retirement balance lags behind where you think it should be, incremental changes can still make a meaningful difference.

• Increase contributions gradually: Workplace retirement plans allow automatic annual increases, raising contributions by 1% per year. That small adjustment can compound over time, especially in a tax-advantaged account like a traditional 401(k).
• Capture the full employer match: If your employer offers matching contributions, failing to contribute enough to receive the full match effectively leaves compensation on the table.
• Reevaluate high fixed expenses: Driving your car longer, refinancing a high-interest auto loan, or choosing a less expensive vehicle next time can free up cash for retirement contributions.
• Automate savings beyond the workplace plan: Workers without employer-sponsored plans may consider options like an IRA or state-sponsored auto-IRA programs, which have expanded access to retirement savings in several states.
• Avoid lifestyle creep: When income rises, directing at least a portion of the increase to retirement before expanding discretionary spending can help close the gap faster.

The reality is that many Americans are balancing immediate needs with long-term goals. But the NIRS findings suggest that prioritizing retirement—even modestly more than before—could make a measurable difference over time.