How do American households save for retirement?

Self-employed households have less money in retirement accounts but more in checking, savings, and financial assets than families with heads of households working for employers.

Updated on Mon, July 10, 2023 by the USAFacts Team

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The Federal Reserve Board’s 2019 Survey of Consumer Finances offers insights into household savings, income, and balance sheets. Data from the survey reveals that retirement savings vary depending on age, employment, race, and educational attainment. USAFacts explored the data, found that half of American households have no retirement savings, and published an interactive project showing savings by age. Here, we’ll explore savings by employment, race, and education.

Retirement savings for self-employed Americans

While households working for an employer had a median of $5,800 in retirement accounts (including IRA, Keogh, or pensions), self-employed households had $4,700 less with a median of $1,100.

However, self-employed households had more money in other accounts, where they also may be storing savings for retirement. They had more than twice as much in their checking and savings accounts ($13,461 versus $5,010) and financial assets ($61,000 versus $24,455), and over four times the net worth ($379,743 versus $90,200) compared to households working for an employer.

How do retirement savings vary by race?

Regarding data by race, the Federal Reserve survey focused on four groups: white households, Black households, Hispanic households, and households comprised of multiracial people or people of other races. White households and households in the “other” racial category had significantly higher median savings and net worth than Hispanic and Black households.

Households in the other category saved the most: a median of $53,889, That’s 12 times the amount possessed by Hispanic households and over six times the amount for Black households. Other households also had the most money in their checking and savings accounts (a median of $9,000), four times the amount possessed by Hispanic households and five times the amount for Black households.

Hispanic households had a median of $375 more in their checking and savings accounts than Black households, but Black households ($8,772) had a median of double what Hispanic households had ($4,550) in financial assets.

Retirement accounts revealed the most dramatic differences: white and other households had medians of $15,824 and $12,000 respectively, Hispanic and Black households had medians of $0.

College graduates save more for retirement

Savings grows with education levels, with the most significant difference between people with some college and college graduates. People with a college degree had substantially more savings in their retirement accounts (1,940%), checking and savings (over 336%), and financial assets (nearly 600%) compared to those with some college education.

The difference between households with a high school diploma and those without was also notable. Households with diplomas had almost 155% more in their checking and savings and over 500% more in financial assets.