15 States with the Lowest Average Retirement Savings (Is Yours One?)
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15 States with the Lowest Average Retirement Savings (Is Yours One?)
A middle-class reality check on retirement balances, state-by-state headwinds, and what to do next—without shame.
Last updated
December 20, 2025
Retirement “averages” move slowly, but your bills don’t. This is a clarity-first guide for cash-tight households trying to build a future.
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Table of Contents
Retirement is the least sexy bill you’ll ever pay
Let’s be real: most middle-class people aren’t “planning for retirement.” You’re surviving the month.
You’re paying the mortgage (or rent that acts like one), the car insurance, the groceries that keep levitating,
and the one random expense that shows up like it pays rent.
Retirement is what you promise yourself you’ll get serious about once life calms down.
And life—if you’ve noticed—doesn’t really do calm.
This post is about the 15 states with the lowest average retirement account balances.
But it’s also about what those numbers mean if you’re living the middle-class reality: debt, family obligations,
and the chase for stability that always seems one paycheck away.
What these numbers mean (and don’t)
The state figures below come from a state-by-state list of average retirement account balances
published by Nasdaq (from GOBankingRates, using Personal Capital data). You can review the source list here:
Nasdaq: The Average Retirement Savings in Every State.
Two quick warnings before you compare yourself to a number
First: “Average” isn’t “typical.” A few high balances can pull the average up, even if most people are nowhere near it.
If your brain immediately goes to shame, stop. Shame doesn’t fund retirement. Systems do.
Second: state-level numbers are a signal, not a verdict. States differ in wages, job mix, benefit access,
and cost of living. Your state landing low doesn’t mean you’re doomed. It means the headwinds are real where you live.
The 15 states with the lowest average retirement savings
Values shown are the average retirement balance for each state.
| Rank (lowest) | State | Average retirement balance |
|---|---|---|
| 1 | Utah | $315,160 |
| 2 | North Dakota | $319,609 |
| 3 | Mississippi | $347,884 |
| 4 | Oklahoma | $361,366 |
| 5 | Arkansas | $364,395 |
| 6 | Hawaii | $366,776 |
| 7 | West Virginia | $370,532 |
| 8 | Tennessee | $376,476 |
| 9 | Nevada | $379,728 |
| 10 | Wyoming | $381,133 |
| 11 | New York | $382,027 |
| 12 | Louisiana | $386,908 |
| 13 | Montana | $390,768 |
| 14 | Rhode Island | $392,622 |
| 15 | Alabama | $395,563 |
FMC reality check
If your state is on this list, don’t turn it into a personal indictment
This list doesn’t measure your character. It measures the environment: wages, benefits, and how expensive it is to simply exist.
The bigger picture: a lot of America isn’t sitting on a retirement pile
You’ve heard the “$1 million retirement goal” so many times it’s basically background noise. But the country is not living that story.
A Congressional Research Service (CRS) analysis of the 2022 Survey of Consumer Finances reports that 54.3% of U.S. households had retirement account assets in 2022.
That means a huge share of households had none.
CRS also breaks down how uneven those balances are, with a sizable share of households at $100,000 or less—and far fewer above $1 million.
In other words: if you’re trying but you’re not “there,” you’re in common company.
Why some states land at the bottom (it’s not laziness)
If you’re middle class, you already know this: you can’t “mindset” your way into higher wages, cheaper groceries, and employer matches that don’t exist.
State averages are shaped by the boring, powerful stuff.
Access to plans (or the lack of them)
In places with more small employers, more hourly work, and more contract/gig arrangements, fewer people get a simple “set it and forget it” retirement plan.
When the system isn’t automatic, saving becomes a personality test—and middle-class life is too chaotic to run your future on willpower.
Cost of living eats the margin
Hawaii showing up here makes sense. When your baseline life costs more—housing, utilities, food—your “extra money” disappears before it ever becomes savings.
The middle class isn’t failing. The margin is.
The middle-class squeeze
The middle class often earns too much for help and not enough for ease. You qualify for the bills. You don’t qualify for relief.
And you still get told you should be maxing everything.
Social Security: a foundation, not a full paycheck
Some people talk about Social Security like it’s a complete retirement plan. It’s not.
The Social Security Administration’s Monthly Statistical Snapshot shows that in November 2025,
the average monthly benefit for retired workers was $2,013.32.
That’s real money. It also gets swallowed fast if you still have housing costs, healthcare bills, car costs,
and family responsibilities. Social Security is the foundation. For most middle-class households, it’s not the whole house.
Three middle-class snapshots (because numbers don’t pay bills—people do)
Snapshot #1: “Stable” on paper, tight in real life
You’re 41. Mortgage is $2,450. Daycare is $1,200. Car insurance jumped again. You contribute 5% to the 401(k),
mostly because payroll makes it easy.
Then the AC dies. You don’t pull from savings because savings is thin. You put it on a card.
Now your retirement contribution feels like it’s fighting your APR. That’s not irresponsibility. That’s pressure.
Snapshot #2: No employer plan, so retirement becomes “when I remember”
You’re 37. You work hard. Decent income. No 401(k). No match. Retirement is something you’re supposed to do on your own,
which translates to: “when the month doesn’t punch me in the mouth.”
You’ve got the intention. You don’t have the system.
Snapshot #3: Late start after life happened
You’re 52. Divorce. Layoff. Medical mess. A parent who needed help. You didn’t ignore retirement—you got hit by real life.
Now you’re rebuilding, and the loudest voice in your head isn’t motivation. It’s time.
Debt vs retirement: the decision framework people actually need
Middle-class advice gets weird because it pretends you can do everything at once.
The real question is the one people don’t want to admit they’re asking:
“Should I pay debt down first, or save for retirement?”
Here’s the plain answer: it depends on the interest rate—and whether you’re leaving free money on the table.
| Your situation | Do this first | Why it matters |
|---|---|---|
| You get an employer match | Contribute enough to capture the full match | That match is part of your pay. Don’t donate it back. |
| High-interest credit card debt | Attack it aggressively (keep match if possible) | High APR is compounding against you every month. |
| Moderate-interest debt (many student loans) | Split focus: match + steady payoff | Progress on both fronts without breaking cash flow. |
| Low-interest debt (often mortgages) | Prioritize retirement consistency | The bigger risk becomes not investing at all. |
This isn’t moral. It’s math. And the biggest trap is pretending minimum payments are “fine.”
Minimum payments are you renting your own past.
No employer plan? Here’s the non-fancy path
If your job doesn’t offer a 401(k), your next best move isn’t complicated.
It’s boring—and boring is good.
Step 1: Open an IRA (Traditional or Roth)
Traditional IRAs can offer tax advantages now (depending on your situation).
Roth IRAs can give you tax advantages later. The “right” choice depends on taxes.
But the most important part is: open the account.
Step 2: Automate a number you won’t “feel” at first
Start with what sticks. If $25 a week is what you can do, do $25 a week. The deposit is the victory.
Consistency is what builds the base.
Step 3: Raise it when life gives you oxygen
Increase contributions when a raise hits, when a car gets paid off, when daycare ends,
or when you cancel a bill you don’t even like. Capture the “found money” before it disappears.
The retirement leaks nobody talks about
People don’t just fall behind because they “didn’t save.” A lot of them saved—then lost years to leaks.
Cashing out when you change jobs
That rollover check looks like help. It’s often a future tax-and-penalty boomerang.
If you can roll it over, roll it over.
Loans that become permanent
A 401(k) loan usually starts as “temporary.” Then life stays expensive and the loan becomes your new normal.
The damage isn’t just the money—it’s the time you stole from compounding.
Lifestyle creep that happens quietly
Middle-class raises get eaten by insurance hikes, grocery hikes, and everything else.
If you don’t intentionally capture part of the raise, it disappears like steam.
Healthcare: the retirement budget killer (respect it, don’t fear it)
Even with Medicare, healthcare can be a meaningful monthly cost: premiums, deductibles, prescriptions,
dental, vision, hearing, and the stuff Medicare doesn’t cover the way people assume.
You don’t have to panic. But you do have to plan.
If you have access to an HSA and you can afford to contribute, it can help you future-proof healthcare costs.
If you can’t right now, that’s not failure—it’s triage.
Quick self-check (no calculators, no shame)
Ask yourself:
- If I lost income for 60 days, would I raid retirement to survive?
- Do I know my employer match and vesting rules, or am I guessing?
- Am I saving consistently—or only when life is calm?
- If Social Security is roughly $2,013/month on average, what’s my monthly gap likely to be?
If those questions made you uncomfortable, good. Awareness is the start of control.
7 / 30 / 90-day action plan
You don’t need a perfect plan. You need a plan you’ll still be doing when life gets loud.
Timeline
Your Retirement Reset: 7 / 30 / 90
Next 7 Days Stop guessing. Get the facts.
Do this: Find your balances, confirm your employer match, and set an automatic contribution—even if it’s small.
Goal: Turn anxiety into clarity.
Next 30 Days Build a buffer so retirement stops being Plan B.
Do this: Start a starter emergency cushion, target high-interest debt, and (if possible) bump contributions by 1%.
Goal: Keep life’s surprises from raiding your future.
Next 90 Days Build a system you can keep.
Do this: Consolidate old plans, choose a simple investment approach, and set auto-escalation so raises help future-you first.
Goal: Consistency, not perfection.
Want a national context check? Fidelity’s Q3 2025 retirement analysis reports the average 401(k) balance at $144,400 and the average IRA balance at $137,902.
Use numbers like these as a benchmark—not a verdict.
How to talk to your partner about this without starting a war
Money fights are rarely about money. They’re about fear.
So don’t open with blame. Open with the truth.
- “I’m not saying we’re failing. I’m saying we’re exposed.”
- “Let’s pick one change we can live with for 90 days.”
- “We’re not trying to become rich. We’re trying to become unshakeable.”
Then make it practical: one shared goal, one shared sacrifice, and one small shared reward so it doesn’t feel like punishment.
Key takeaways
What to remember when your state shows up on the “low savings” list
- “Average” isn’t “typical.” Don’t do shame math with a number that can be skewed.
- State rankings are headwinds, not destiny. Wages, benefits, and costs differ.
- If there’s a match, take it. That’s the closest thing to free money most people get.
- High-interest debt is anti-retirement. Kill the APR compounding against you.
- Automate something. Small consistent deposits beat “big plans” that never happen.
FAQ
Questions people ask (but don’t always say out loud)
My state is on the list. Does that mean I’m behind?
No. It means many people near you face real headwinds. Use it as a warning light, not a label.
Should I pay off debt before saving for retirement?
If you have an employer match, capture it. Then prioritize high-interest debt. After that, scale retirement contributions as cash flow improves.
I don’t have a 401(k) at work. What’s my next best move?
Open an IRA and automate deposits. Start small. Increase after raises, debt payoffs, or when a major expense ends.
I’m 40+ and barely started. Am I cooked?
No. Late starts are common. The move is: automate contributions, capture matches, reduce high-interest debt, and keep increasing when you can.
How much savings is “enough”?
There’s no magic number for everyone. Focus on building a reliable savings rate and shrinking the gap between your future expenses and your future income.
Talk to us
Comment prompt
Be honest: What’s the #1 thing that keeps you from saving more for retirement right now—housing, debt, childcare, healthcare, or something else?
If you’re comfortable, share your state too. It helps readers see they’re not alone.
Sources
Where the numbers come from
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