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25% of US adults have no retirement savings

Alicia Adamczyk

A new report from the Federal Reserve paints a bleak picture of America's retirement savings.

Almost a quarter of adults in the U.S. have no retirement savings or pension at all, according to the Fed's 2018 Report on the Economic Well-Being of U.S. Households , and just 36% percent of non-retired adults think that their retirement saving is on track. The report also found that a third of middle-class adults can't afford to cover a $400 emergency .

Of non-retired adults with savings, 54% say they have money in a 401(k) or 403(b) plan, 33% have an individual retirement account and 22% have a pension.

Retirement preparedness, of course, varies by age. Young workers aged 18 to 29 are less likely to have savings, with 42% saying they have nothing stashed away, while 17% of those aged 45 to 59 say the same thing.

A bipartisan bill passed by the U.S. House of Representatives on Thursday, May 23, could help Americans save more. The Secure Act would make it easier for small businesses to offer 401(k) plans  and eliminates the maximum age to contribute to IRAs, which is currently 70½.

The bill would also require businesses to make retirement accounts available to long-term, part-time workers. The bill is now heading to the Senate.

How to save for retirement

The best way to save for retirement is through a 401(k) or IRA. These accounts offer tax benefits and potentially compounded returns when invested in low-cost index funds.

And because contributions are often automatically deducted from an account holder's paycheck, it can be easier to build up savings. In fact, Fidelity recently found that the average 401(k) balance for accounts held at the company is $103,700 .

Automating your savings is key, experts say.

"I automated my money years ago and the benefit is, I don't have to make decisions about where my money should go, how much I should invest, what I can spend, do I have enough savings and so on," Chris Reining, who quit his IT job at age 37 with more than $1 million in the bank, told CNBC Make It .

How much you're able to put away depends on your circumstances and income. But experts at the Stanford Center on Longevity have found that to retire at age 65 and maintain your standard of living, you'll need to save 10 to 17% of your income , starting at age 25.

If you can't manage that, then at least save up to the employer match, if you're offered one. If not, investing even 1% of your income can be a good start . No matter what you do, don't put saving off.

Need more tips to save?

  • How to save for retirement without going broke
  • New study says save at least 11% of your income for retirement—here are 5 ways to do that
  • Everything you need to know about 401(k)s, IRAs and other retirement savings accounts

Don't miss: How much money Americans have in their 401(k) at every age

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