Retirement Retirement Planning

9 Signs Your Retirement Plan Is Actually Better Than Most Americans

These signs indicate you're on track for a better retirement than many.

Edited by Andrea Basse

Updated Jan. 20, 2026

While dreaming of an enjoyable retirement is easy, figuring out how to have enough income to cover your desired lifestyle is trickier. Ultimately, you'll need a solid retirement plan that accounts for changing expenses and helps prevent outliving your savings or relying on debt.

You might wonder whether you're currently on track for retirement based on benchmarks. Here are nine signs your retirement plan is better than most Americans' and tips for catching up.

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You won't rely only on Social Security

According to a report from the Social Security Administration, while Social Security benefits are meant to replace approximately 40% of what you earned before retiring, they account for at least half of retirement income for 44% of women and 39% of men in the 65+ age group. So, if your plans include having sufficient retirement savings and other income sources, you're better off than many.

If you currently expect to rely heavily on Social Security, make a retirement savings plan and explore other potential income sources. For example, you might be open to working a part-time job or side gig.

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You have a retirement account

The 2022 Federal Reserve Survey of Consumer Finances indicates that about 46% of Americans lack retirement accounts. Less than half of the lowest earners participate in plans.

Having and regularly contributing to a 401(k), an IRA, or another retirement account puts you in a good position, as you're making progress toward a financially stable retirement. If you haven't opened one, explore your options and get familiar with annual limits and tax perks.

You have above-average retirement savings for your age

The Vanguard How America Saves 2025 report shows these average 401(k) account balances by age:

Younger than 25: $6,899
25 to 34: $42,640
35 to 44: $103,552
45 to 54: $188,643
55 to 65: $271,320
65 and older: $299,442

Exceeding these numbers puts you ahead of most Americans. But keep in mind that your retirement savings needs will depend on factors like your intended lifestyle and other available income sources. Know your target number and adjust your strategy accordingly.

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Your retirement plan contribution rate is high

A rule of thumb is to contribute at least 15% of your before-tax pay toward retirement (including your portion and any employer match). According to 2024 Fidelity data, baby boomers and Gen Xers are meeting this target, while millennials and Gen Zers are falling short.

If you're not contributing enough, you're putting your retirement savings goal at risk, and catching up can be difficult. Consider cutting your expenses to provide you with spare cash you can contribute automatically from each paycheck to your work's plan or transfer to an IRA.

Your retirement portfolio is diversified.

If you don't properly diversify your portfolio, you risk losing to inflation or market changes and not having enough funds for your retirement years. However, a 2024 report from Jackson Life Insurance Company notes that only 14% of the most vulnerable investors had diversified sufficiently, with at least four asset categories.

To avoid making this common mistake, consider working with a financial advisor who can help you choose a diverse mix of assets, such as stocks, bonds, and cash. They'll have advice on how to carefully balance risk and return to meet your savings goal.

You're saving for future health care

While health care costs during your retirement years average $172,500, Fidelity's data shows that 77% of Americans aren't putting funds in a health savings account (HSA). This puts them at risk of draining their retirement savings to cover out-of-pocket expenses for health conditions and injuries that often arise with age.

If your health insurance plan makes you eligible for an HSA, you'll come out ahead of most Americans if you contribute regularly to it. Plus, you'll avoid income taxes on the contributions, growth, and withdrawals as long as you properly use the funds.

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You have emergency savings

The 2022 Federal Reserve Survey for Consumer Finances shows that 45% of Americans lack the emergency savings needed to cover three months of expenses. Besides hurting your financial security now and increasing your risk of debt, lacking savings can compromise your ability to contribute to retirement and avoid early withdrawals.

If you're low on savings, automatically save a portion of your pay until you have three to six months' worth of essential expenses. Having this safety net during retirement will also put you ahead of many.

You're working toward a debt-free retirement

Credit card debt is a reality for the majority of retirees, according to a 2024 Employee Benefit Research Institute study. It's also not uncommon to enter retirement with a hefty mortgage payment, which can quickly consume your limited retirement income.

If your retirement plan includes paying off debt and avoiding future borrowing during retirement, you're on a better track than many Americans. If not, now's a good time to list your balances, develop a payoff plan, and budget your money to avoid additional debt.

You're actually on track to meet your retirement goals

According to Charles Schwab, only 26% of retirement plan participants are actually on track for retirement, despite the majority believing they are. This is based on factors like the person's age, retirement plan balance, savings rate, and investment allocation.

Your retirement plan will be better than most Americans' if you regularly save enough to cover the gap that other retirement income sources, like Social Security, will leave. Maximizing your employer match, boosting your savings rate, and carefully choosing investments can help.

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Bottom line

Having a solid retirement plan offers peace of mind and increases the likelihood that you'll be able to enjoy the lifestyle you desire in your retirement years. But even if your current plan falls short, you still have time to get back on track; the sooner you take action, the better.

No matter how well you've prepared for retirement, be flexible since you may need to adapt your plan. Perhaps that means working a little longer to maximize your Social Security benefits or moving to a lower-cost area to stretch your fixed income.

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