As the new year begins, savings have hit unprecedented levels, but rising health care costs and growing poverty make retirement unaffordable for many.
By Mark Miller
Kiersten Essenpreis
America is aging fast.
By 2030, one in five Americans will be 65 or older, and by 2034 older adults will outnumber children for the first time, according to the Census Bureau. This year, the oldest baby boomers turn 80.
That demographic shift is reshaping a vast share of the U.S. economy, from participation in the labor force to retirement savings, Social Security and Medicare outlays, health care spending, housing and financial services. Retirement is one of the largest — and fastest-growing — forces in the economy.
But aging in America is unfolding unevenly. Wealth inequality, inadequacies in retirement plan coverage, and rising health and long-term care costs mean that some households are enjoying remarkable financial security in retirement, while others are struggling to afford it at all. And poverty rates among older Americans are rising — the only age group to see an increase in recent years.
Here are seven numbers that provide insights into some of the key trends shaping retirement as we head into 2026.
The trend is more pronounced among women — their retirement age has jumped to 62.6 in 2024 from about 55 in the 1960s — although the rapid growth of women in the work force during the second half of the last century makes this more difficult to measure.
The average age when people claim Social Security also has risen by about two years since the mid-1990s — a trend that persisted even through the pandemic, which many forecasters predicted would push older workers to claim benefits early. “A lot of people ended up being able to work from home, and for certain types of workers, that actually allowed them to delay retirement,” said Anqi Chen, the center’s associate director of savings and household finance.
However, a sizable group of people on Social Security — 40 percent — continue to work after claiming benefits, typically for several years. Most of them are lower lifetime earners who claim early and then work part time; the rest are high earners who often work full time after claiming near the full retirement age.
“People do flow in and out of retirement,” Ms. Chen said. “It might be due to their health, or their economic or family situation, but some people find it difficult to actually afford retirement.”
$45.8 trillion was invested in individual retirement accounts, 401(k)s, pension funds, and annuities at mid-2025 — nearly double the total a decade ago.
Strong markets have played a big role in that jump, but rising participation and contributions in 401(k) plans have also pushed growth.
Most of the recent asset growth has occurred in 401(k)s and I.R.A.s, and I.R.A.s have held more assets than workplace plans for five consecutive years, a shift driven largely by rollovers as baby boomers retire, said Peter Brady, senior economic adviser at the Investment Company Institute.
“That’s where a lot of the action is now, and a lot of the competition as people transition into retirement,” Dr. Brady said, referring to efforts by employers to entice retirees to stay in their plans by offering new payout options, and financial services firms seeking to capture rollover dollars.
85 percent of workers with access to a 401(k) participate, according to Vanguard — up steadily over the past decade.
The average participant savings rate in plans administered by Vanguard reached a high of 7.7 percent of wages in 2024, boosted by automatic enrollment and escalation of contribution rates.
These changes have made the 401(k) system more resilient, with retirement savers staying the course despite upheaval from the pandemic, market gyrations and inflation over the past five years, notes David Stinnett, head of Vanguard’s Strategic Retirement Consulting group.
“Due to these default features, people just keep going,” he said.
Combined participant and employer contribution rates have climbed steadily over time to an average of 12 percent of wages, up from 10.8 percent as recently as 2015. And there’s been strong adoption of target date funds, which automatically rebalance portfolios to age-appropriate asset allocations. At Vanguard, 84 percent of participants used target date funds in 2024, up from 69 percent in 2015 — and 59 percent were invested solely in those funds, Vanguard reports.
Here’s the rub: only half of private-sector workers are covered by a workplace retirement plan at any given time, mainly because small employers are less likely to offer plans.
The coverage gap helps explain why median retirement account holdings for workers 55 to 64 years old was just $185,000 in 2022, according to the Federal Reserve, and the amounts saved by low-income workers have fallen in recent years. There are also persistent disparities in savings by race and ethnicity, with median Black households holding only 14 percent as much as white households, and Hispanic households just 20 percent compared with white households.
$24,500 is the new maximum 401(k) contribution for 2026, plus an $8,000 catch-up for workers age 50 and older.
For savers age 60 to 63, there’s a “super-catch-up” option with a limit of $11,250. Under recent law, catch-up contributions must be made using a Roth contribution option within a 401(k) for workers earning more than $150,000.
The I.R.A. contribution limit is $7,500, with an additional $1,100 catch-up for older savers.
$11,000 more in annual premiums is the average hit facing some early retirees as expanded Affordable Care Act subsidies expire.
About half of enrollees eligible for subsidies are ages 50 to 64 — too young for Medicare.
A 64-year-old with income just above the subsidy cutoff ($62,700) would pay $16,500 a year for a benchmark silver plan on average, up from $5,328, according to KFF.
“It’s the pre-Medicare population that will get slammed hardest with higher premiums if the enhanced subsidies don’t get extended,” said Tricia Neuman, senior vice president of KFF. The subsidies expired on Dec. 31; a vote is expected in the House of Representatives this month on a proposed three-year extension of the tax credits, but the fate of efforts to renew them is uncertain.
Medicare costs are also rising sharply. The standard Part B premium is $202.90 per month this year — up nearly 10 percent and 66 percent higher than a decade ago. Medicare trustees project another 7.75 percent increase in 2027, to $218.60, and nearly $350 by 2034.
The increases hit lower-income beneficiaries hardest. One in four Medicare beneficiaries had incomes below $24,600 in 2024, and half lived on less than $43,200, according to KFF.
“It’s a big share of income, and premiums are rising faster than income,” Dr. Neuman said.
$10,650 a month was the average cost of a private nursing-home room in 2024, according to CareScout, a company that publishes an annual study on the cost of long-term care.
Per month, assisted living care averaged $5,900 and a full-time home health aide was $6,500 — still well beyond what most families have planned for.
Nearly 85 percent of adults over age 65 say they expect to live in their current home for the rest of their lives, according to University of Michigan research, although preparations to do that vary widely.
“Nobody says, ‘I can’t wait to go to an assisted living facility,’” said Samir Shah, CareScout’s chief executive, “but the lingering pressures from the pandemic, the rising cost of care and greater longevity are all combining to create a very rapid shift away from people going into assisted living facilities.”
15 percent of older adults lived in poverty in 2024. That’s up from 10.7 percent in 2021 — and it’s the only age group that has seen an increase in poverty.
“We’re seeing the cost of living getting higher for everyone, especially health care costs,” said Jane Tavares, a gerontologist at the LeadingAge LTSS Center at the University of Massachusetts, Boston. “That impacts older adults more because they tend to be sicker and they’re living on limited incomes.”
An index tracked by the center finds that half of people over 65 cannot afford to meet their basic living expenses. And research by the center and the National Council on Aging found that 80 percent of older households don’t have the financial resources to weather major financial shocks such as widowhood, serious illness, or the need for long-term care. The financial struggles extend to middle-income households. For example, in 2022, households with median total income of $46,200 had just $15,800 in non-housing financial assets that could be tapped in the event of a financial shock.
Cuts to food assistance and Medicaid eligibility under the budget legislation signed into law last year by President Trump will worsen the poverty outlook for older Americans, Dr. Tavares said. “People need to be aware that there’s no fallback when you make these cuts.”
A version of this article appears in print on Jan. 4, 2026, Section BU, Page 3 of the New York edition with the headline: Seven Numbers Shaping the Landscape Going Forward. Order Reprints | Today’s Paper | Subscribe
