---
title: 'WTF Just Happened To Your Retirement Accounts?!'
source: 'https://youtube.com/watch?v=WPbDqGqt7L0'
video_id: 'WPbDqGqt7L0'
date: 2026-06-28
duration_sec: 0
---

# WTF Just Happened To Your Retirement Accounts?!

> Source: [WTF Just Happened To Your Retirement Accounts?!](https://youtube.com/watch?v=WPbDqGqt7L0)

## Summary



## Transcript

A record number of Americans are now
carrying credit card debt that they
can't pay down. More Americans are
tapping into their 401ks for
emergencies. Costs are high. Americans
are struggling. Inflation is outpacing
folks paychecks.
>> A family of four now needs nearly
$140,000 a year just to survive.
>> Well, what if people just don't pay it?
>> What's up, guys? It's Graeme here. So,
I'm going to show you exactly how much
money everyone else has in 2026 and then
exactly where you rank. Because once you
see the actual numbers, you'll realize
that a lot of people are quietly falling
behind and they don't even know it yet.
Like, to put this into perspective,
Vanguard just released a brand new
report that tracks the retirement
accounts of nearly 5 million people. And
on the surface, the average person now
has $167,000
stashed away in retirement. Except that
number is basically a lie because the
typical American, the person right in
the center, has just $44,000. And worst
of all, one in four people have less
than $10,000. Well, one in 10 have zero
or negative net worth to their entire
name. That's why we really got to break
down how much money people actually
have. The one secret that's quietly
turning everyday people into
multi-millionaires, and then most
importantly, what you could do about
this starting today to come out ahead.
Because if this trend continues, the
next crisis won't be people losing money
in the stock market. It'll be people in
their 20s and 30s realizing that they
can't afford a house, they can't afford
kids, they can't afford an emergency,
and somehow they still can't afford to
stop working. Although, before we start,
as usual, if you appreciate the
breakdowns like this, it would mean the
world to me if you hit the like button
and subscribed if you haven't done it
already. Yes, I know it's the millionth
time I've asked, but it does help
tremendously and is a huge thank you for
doing that. Here's a picture of Karen.
So, thanks so much and also big thank
you to Rocket Money for sponsoring this
video. But more on that later. All
right, so before we talk about how much
the typical American has saved, why
people are falling behind, and then what
you could do about it, we need to talk
about the savings crisis. For those
unaware, every year, Vanguard analyzes
the real accounts of 5 million Americans
to put together what is basically a
financial X-ray of the entire country.
With this, we're able to see exactly how
much money people are putting away for
retirement, exactly where they're
investing, and what they do when the
market goes crazy. And when it comes to
that, the 2026 report is pretty
shocking. Why? Well, as it turns out, we
have some really good news and some
really bad news. We'll start with the
good news first. Believe it or not,
Vanguard says we have what's called a
retirement revolution because 25 years
ago, only 65% of workers bothered to
participate in their 401k. But today,
that number just hit a record 86%. On
top of that, the savings rate of those
people has just hit an all-time high of
12.1%.
Again, on paper, this is really great.
But in terms of the bad news, this is
what the headline misses. Even though
the average person has a 401k balance of
$167,000,
in reality, the average takes everyone's
balances, adds them up, and then divides
by that number of people, which means
those results are skewed by a small
number of multi multi-millionaires.
Like, if I'm in a room with Elon Musk,
our average net worth is closer to $550
million, even though me personally, I'm
closer to zero than I am 550 million.
That's why to get an accurate
understanding of these numbers, it's a
lot more important to look at what's
called the median, the person standing
right in the middle. And in this report,
the median person had less than a third
of the average at just $44,000.
So the next time you see a headline
celebrating that Americans have record
401k balances, they're really describing
a very wealthy group at the top and
conveniently leaving out everybody else.
So, in terms of just how big this gap is
growing and why some people are making
so much more money than others, we need
to talk about exactly where people are
investing. And to do that, this brings
me to the breakdown by age. Now, here's
where things get really interesting. In
terms of where people are investing,
despite what you might see, most people
are not buying IPOs, meme stocks, and
cryptocurrency with their retirement.
Instead, roughly 70% of people are in
what's called a professionally managed
allocation, and about 61% of people are
in a single target date index fund with
nearly two out of every $3 being
invested in this way. However, here's
where things get pretty disappointing.
Because when you break down the balance
by age, the gap between the median and
average becomes way too big to ignore.
Like first, for people aged 55 to 64,
the median 401k balance is only around
$95,000, which might seem like a lot
until you consider that a 4% withdrawal
rate, which is considered the safe
amount that you'd be able to spend in
retirement without running out of money,
only gives you $3,800 a year in
spending, or $317
a month to spend in retirement after
working for 40 years. Of course, in
fairness, these numbers could be low
because some Americans are already
drawing down from their 401k. This
doesn't include other retirement
accounts, and perhaps they have other
savings or investments elsewhere to fall
back on. So, it's not as apocalyptic as
this might seem, but the overall results
are pretty undeniable. Most Americans
are coming up on retirement with way
less than they'll actually need, and
they're leaning on social security to
hopefully bridge that gap. Now, second,
there is another layer to the story
which changes the results entirely, and
that's the fact that unfortunately 40%
of Americans have absolutely no
retirement savings in any account
whatsoever. That's why when you put all
of this together, you could clearly see
that most people are not saving anywhere
near the amount that they should be. And
a lot of people are expecting to fall
back on social security, which may or
may not be there by the time they
actually expect to receive it. So, in
terms of how you compare at every age by
amount, how much you should be saving to
catch up, and what you could do today to
put yourself ahead, here's exactly what
you came for. Although, before we go
into that, this is exactly why it's so
important to understand exactly where
all of your money goes every month.
Because for most people, you don't fall
behind all at once. It happens slowly
over time, like all the subscriptions
you've forgotten about, the payments
you're not shopping around for, and then
at the end of the year, that could be
the difference between having a whole
bunch of extra money left over to invest
and wondering where it all went. That's
why I think budgeting is so important,
not just for future retirement, but also
everyday necessities. And one of my
favorite ways to do this just so happens
to be the sponsor of today's video, and
that would be Rocket Money. For those
unaware, Rocket Money is an all-in-one
personal finance app that allows you to
track your spending, manage
subscriptions, create custom budgets,
and see your finances in one place
instead of having to jump around through
different accounts. For me, the big
value is that it gives you a clearer
picture of exactly where your money is
going. Like, I could track exactly what
I spend, make sure everything gets paid,
and audit my entire financial statement
in one dashboard. On top of that, Rocket
Money could also help track your
subscriptions in one place. And with a
couple of taps, you could cancel the
ones you no longer want. This alone
could save you a lot of time because
most people don't realize how many
active subscriptions they have until
they see them in one dashboard. And the
data backs this up. In fact, you could
save up to $740 a year when you use all
of the app's premium features. So, if
you want a better way to manage your
money, just head to rocketmoney.com/gram
with the QR code also on the screen or
the link down below and unlock even more
features with premium. Again, just check
out rocketmoney.com/gram
with the link below, QR code on the
screen. Thank you so much. And now,
let's get back to the video. All right,
so in terms of the average 401k balance
by age, where you stand, and exactly
what people are investing in, there's
one more topic worth discussing first,
and that would be the savings collapse.
Believe it or not, according to the
Federal Reserve, the median American
household has about $8,000 in their
checking and savings accounts combined.
And it gets lower the younger you are.
Like for those under the age of 35, that
number drops to about 5,400. And for
older people living alone, it's as low
as 4,300. So between a median $8,000 in
the bank, and 44,000 in retirement.
That's basically the entire financial
picture for the typical American. And
that also means that most people are
just one ER visit, one busted
transmission, or one layoff away from
going broke or drawing down from their
retirement accounts that they've spent
decades building. Oh, and speaking of
that, this is the part of the Vanguard
study that's most concerning. Hardship
withdrawals, where people pull out of
their 401k, eat the penalty just to pay
for an emergency, hit a record 6% of
participants this year. This is the
sixth straight year that this has
increased, and it's roughly triple what
it was from before the pandemic. On top
of that, about 13% of people now have
outstanding loans against their 401k,
meaning people are literally borrowing
from their future selves just to pay for
the present. Why is this happening?
Well, here's the number that ties it all
together. The US personal savings rate,
which is how much money people have left
over after all of their expenses, just
fell to 2.6%, which is the lowest it's
been since April of 2008, right before
the Great Financial Crisis. Like, just
for context here, the 30-year average is
about 5.7%. So, we're less than half the
average. And this amount has been
dwindling every single month. like it
was 4.3% in January, 3.6% in February,
3.2% in March, and now 2.6%. In addition
to that, here's what most people are
forgetting. The savings rate is
collapsing at the same time that the
stock market has increased 28% over the
last year. It seems like a
contradiction, but it's actually the
clearest picture of a K-shaped economy,
where those at the top are doing better
than ever while those at the bottom are
barely scraping by. In fact, the data
shows that 31% of Americans are now
considered upper middle class, an amount
that's tripled since 1979. So for those
at the very top, things have never been
better. But for everyone else, they're
getting squeezed by things like rent,
groceries, insurance, and child care
that have all outpaced incomes. So their
spending has increased. Well, the
savings rate declines. That's why when
you blend these two together, the
average actually seems pretty good. But
when you look at the data points
individually, you'll see that the vast
majority of people are not doing as well
as the headlines say they are. Also,
here's the part that should make
everyone pay attention. Historically,
when the savings rate reaches an
absolute low like this, the stock market
tends to suffer in the years following.
Now, I'm not saying that's a guarantee,
but it's something at least worth
considering. So, with the bad news out
of the way, here's exactly how much you
should be saving by every age and
exactly where you rank. And in terms of
that, we need to talk about the 401k
breakdown. Thankfully, there is an
ultimate cheat sheet for anyone
wondering how much money you need. The
golden standard is that by the age of
30, you have one times your salary
saved. By 40, you want three times. By
50, you want six times. By 60, you want
eight times. And by the time you retire
at 67, you want about 10 times your
annual salary saved across all of your
retirement accounts. Now, if you want to
be within the top 1% of every category,
according to Yahoo Finance, at the age
of 24, you'll need $150,000.
From 25 to 34, you'll need $365,000.
From 40 to 44, that increases to
$1,234,000.
From 55 to 59, that'll take 3.1 million.
And it tops out at $4,574,000
for those aged between 65 to 69. Now,
look, if those numbers make you feel
anxious, just remember that the median
45 to 54 year old has about $87,000
saved against a benchmark of $450,000.
So, if you're feeling behind, just know
that you're not the exception. You're
literally in the same boat as everybody
else. But even if you're behind, that
doesn't mean it's hopeless. So, here's
exactly how you could catch up today.
Number one, if you have a 401k match,
always get your employer contribution. I
know this might sound boring, but it's
literally the most important part of
this entire video. Just do it. Get the
employer match because oftentimes it
means a guaranteed return of anywhere
between 50 to 100%. It's free money.
Always take it no matter what. Always.
Otherwise, it's just it's dumb not to.
Number two, use auto escalation. In this
case, those who set up a default 401k
and autocontribute have way more money
than those who don't. So use that to
your advantage. You're also able to set
up your 401k deposits to automatically
increase 1% every year. You're barely
going to feel it, but over time that
could add up to tens of thousands of
dollars. Number three, if you're over
the age of 50, max out the ketchup
contributions. In this case, the IRS
lets you contribute $7,500 a year extra
on top of your normal contributions. And
when you do this consistently for 15
years, you could add almost $200,000
more to your retirement. Now, number
four, this is something that almost no
one thinks about, but you got to watch
the fees. Like in this case, an index
fund might charge you only 0.03%.
But an actively managed fund could be as
high as 0.75%
or more. It sounds small, but over 30
years that could compound to tens of
thousands of dollars wasted. So pay
attention to it. And then finally,
number five, don't get discouraged if
you're behind. Look, the reality is a
lot of people are behind in these
benchmarks, so you're in good company.
But really, the worst thing you could do
is see how far behind you are, feel
hopeless, and then just do nothing.
Remember, the people who win at this
aren't the ones starting out with the
most money. They're the ones who just
started immediately and then kept it
consistently going over time without
panic selling. So, in terms of what all
of this means for you, what I think
about this, where the market's headed in
the future, and if this data is trending
downwards, here's what you came for.
Overall, I got to say in general, the
economy is getting a little bit better.
More people are contributing to the
retirement and market participation is
increasing, but most people are still
drastically underprepared and not saving
anywhere as much as they need to. And
that's something worth keeping in mind.
Like my honest take is that the people
who win at this are not the ones who are
the smartest or making the most money or
having the highest returns. They're
simply the people who set up a process
as soon as possible, automated
everything, stayed consistent with it,
and that's it. Now, unfortunately, in
terms of where we go from here, I tend
to think that the financial gap is only
going to continue getting worse before
it gets better. like the people who
invest in own assets will continue doing
well while everyone else is going to
fall even further and further behind.
That's why it's so important to be aware
that this is going on and be on the
right side of the chart. So, here's
exactly what I would do. It starts with
keeping as much money on the sidelines
as possible. 3 to 6 months worth of
expenses is most likely sufficient. Keep
that in a high yield savings account so
you're able to earn a little extra
interest. Automate your savings. Always
take the employer match. Look at how
much fees you're paying when it comes to
what you're investing in and then just
keep doing it no matter what. I say all
of this because the reality is you don't
need to be rich to win at this. You
don't have to time the market. You don't
have to find the next big 100x
opportunity. You just need to start with
what you have as soon as possible. And
then no matter what, hit the like button
and subscribe if you haven't done that
already. So with that said, thank you so
much for watching. And also, if you want
bonus content as well as member style
financial audits where I break down your
own personal finances, feel free to join
as a channel member. And as a perk of
that as well, I personally respond to
each and every one of your comments. So,
if that sounds good, feel free to join.
Thank you so much and until next