10 Signs You Are Truly Above Average in Retirement Readiness

The Retirement Gap Most People Do Not See Coming

The median retirement savings for Americans between ages 55 and 64 is around $185,000. Most financial planners say you need somewhere between $1,200,000 and $1,500,000 to retire comfortably. That gap is not small — and many people will not feel its full weight until their late 60s or early 70s.

A Federal Reserve survey found that nearly one in four Americans have no retirement savings at all. Many did not make one big mistake. They simply kept putting it off, assuming there was still time.

The good news: awareness and deliberate action — even now — can make a meaningful difference. Below are 10 signs that you are already ahead of the curve.

You Have Calculated Your Retirement Number

According to the Employee Benefit Research Institute, only 42% of Americans have ever tried to calculate how much money they will need in retirement. More than half are heading into one of the biggest financial transitions of their lives without a target.

If you have sat down and worked through your expected monthly expenses, what your Social Security benefit will be at different claim ages, and what gap your savings need to fill — you are already ahead of the majority. That foundation shapes every other retirement decision.

Your Savings Are on Track With Age-Based Benchmarks

Fidelity publishes widely used retirement savings milestones based on your age and salary:

• By age 40: 3× your annual salary saved
• By age 50: 6× your annual salary
• By age 60: 8× your annual salary
• By retirement (around 67): 10× your annual salary

The national reality looks very different. The average 401(k) balance for someone in their 50s is roughly $160,000; for someone in their 60s, around $242,000. Someone earning $80,000 a year should have between $480,000 and $640,000 saved by those benchmarks.

If your savings are on pace with or ahead of these milestones, you are doing something most of your peers are not.

You Have a Real Social Security Timing Strategy

Social Security is the single largest guaranteed income source most Americans will have in retirement. When you claim matters enormously.

• Claim at 62 (the earliest age): your monthly benefit is permanently reduced by up to 30% compared to your full retirement age benefit.
• Delay to 70: your benefit grows by 8% for every year you wait past full retirement age — a guaranteed return that is hard to match in a traditional portfolio.

Despite this, most Americans still claim before full retirement age, often because they need the money immediately or have never modeled out what delaying would mean in lifetime dollars.

If you have factored in your health outlook, your spouse's situation, and your other income sources to build a deliberate claiming strategy, you are thinking at a level most people never reach. Always confirm your specific benefit estimates directly with the Social Security Administration.

You Have a Healthcare Plan Beyond 'I'll Figure It Out at Medicare'

Healthcare is the biggest wild card in retirement planning. Fidelity estimates the average retired couple will need approximately $315,000 just to cover healthcare costs throughout retirement — and that does not include long-term care.

If you retire before 65, there is a gap where Medicare does not cover you at all. Private insurance during that window can be very expensive depending on your state and health profile.

Even after Medicare begins, there are important decisions to navigate: what Part A covers, what Part B costs, how Part D works with your prescriptions, and whether a Medicare Advantage plan or traditional Medicare with a supplement fits your situation better.

If you have mapped out your healthcare coverage across the different phases of retirement — including the possibility of extended nursing home or in-home care — you are ahead of even many financially savvy people.

You Are Carrying Zero High-Interest Debt Into Retirement

Consumer debt does not disappear at retirement age. The average American household carries nearly $8,000 in credit card debt at an average interest rate above 21%. Every dollar going toward interest is a dollar that cannot support your daily life.

Entering retirement with zero consumer debt — and a mortgage that is either paid off or on a clear payoff timeline — completely changes your monthly cash flow. If that describes your situation, you have removed one of the most common threats to retirement income stability.

You Understand Withdrawal Strategies and Tax Diversification

The 4% rule is a common retirement withdrawal guideline. It suggests withdrawing 4% of your portfolio in year one, then adjusting for inflation each year, giving a high probability that your money lasts 30 years based on historical market returns.

But above-average planners go further. If you retire at 60 or younger, you may need 35–40 years of income. If Social Security or a pension already covers your basic expenses, you may be able to withdraw at a lower rate, extending your portfolio's life. And sequence-of-returns risk — a major market downturn in your first few years of retirement — can permanently shrink your base before it recovers.

Tax diversification matters just as much. Most Americans hold the bulk of their savings in traditional 401(k) or IRA accounts. That money has never been taxed — every dollar withdrawn in retirement is ordinary income. Required minimum distributions (RMDs), which begin at age 73, can push you into a higher tax bracket whether you need the money or not.

Only about 26% of Americans contribute to a Roth IRA. Having Roth savings alongside traditional accounts gives you tax-free income in retirement and lets you manage your taxable income more deliberately year by year.

You Have a Written Income Plan and Keep Learning

A savings target is a milestone. A retirement income plan is a strategy. It maps out which accounts you draw from and in what order, how Social Security fits into your monthly cash flow, what your fixed versus discretionary expenses look like, and how you would handle a large unexpected cost without derailing your plan.

Most people have thought about how much they want saved. Very few have thought systematically about how that money gets converted into sustainable income across a retirement that could last 25–30 years or longer. Working with a fee-only fiduciary financial advisor — or building and regularly reviewing this plan yourself — puts you in a small group with genuine retirement clarity.

Finally, retirement planning is not a one-time event. Tax laws change. RMD rules have shifted twice in the last decade. Medicare costs change every year. Social Security rules evolve. Studies consistently show that financially literate adults accumulate significantly more wealth by retirement than those with low financial literacy, even after accounting for income differences. That gap comes from dozens of small, well-informed decisions made over decades — not one big move.

Keeping your plan in contact with current reality, rather than assumptions made 15 years ago, is what separates people who retire on their own terms from those who do not.