What Counted as a Solid Retirement Fund in 2016 Compared to Now
It’s difficult to recollect exactly what life in the U.S. was like ten years ago. And it’s not just because of the general baggage that comes with any substantial passage of time. It’s because we had yet to experience the impact of a global pandemic. Life after COVID-19 just isn’t the same. Even the state of retirement has changed.
What did a solid retirement fund look like in 2016? What does one look like today? Let’s break it down by looking at the big picture in 2016 and in July 2026, respectively.
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Retirement Fund Contributions Surged in 2016
2016 was a pretty nice year for middle-class earners and their retirement funds. According to 2016 data from the Bureau of Labor Statistics (BLS), personal insurance and pensions expenditures rose 7.6% to $6,831, an uptick driven largely by the 8.2% increase in pensions and Social Security expenditures. Non-payroll deposits in retirement plans were up over 26% in 2016 and up over 83% since 2014. Bottom line: We could afford to save a lot more than we could in years prior.
Inflation Was Low in 2016 and the Economy Was Thriving
In 2016, middle-class Americans were well-positioned to save for retirement because they weren’t struggling to make ends meet. The annual inflation rate was only 1.3%, per the U.S. Inflation Calculator. There was a spirit of financial optimism in the air as it was evident the Great Recession was finally, after all those years, over, as reported by the U.S. Office of Financial Research.
In 2016, We Underestimated What's Needed for Retirement
Though many Americans added heaps to their retirement nest eggs in 2016, they didn’t necessarily have clarity on how much they needed to save. In a survey by Merrill Edge published in December 2016, more than half of respondents said they didn’t think they needed more than $1 million for retirement, which even ten years ago, was a gross underestimate in many U.S. cities.
In 2016, the average net compensation was 46,640.94, according to the Social Security Administration. Now, it depends on your age and career level, but if you were, say, 40 making $46,000 a year in 2016, you should have been aiming to save closer to $1.7 million for a comfortable retirement starting at 65.
While many of us were lowballing our retirement fund’s needs, others were just completely clueless. According to the Merrill Edge survey reported by CNBC, 19% of Americans said they didn’t know what amount of money they should have saved for retirement.
So while we were overall more capable of saving for retirement in 2016 than in previous years, we weren’t necessarily saving enough. This points to a lack of financial literacy, a problem that still plagues us today. In fact, some research, including the new TIAA Institute-GFLEC Report finds we’re less financially literate in 2026 than we were in 2016.
We Need To Be Saving More for Retirement in 2026, but Few Can Afford To
Today, we are facing headwinds on a number of economic fronts that are making saving for retirement more challenging in 2026 than it was in 2016.
So far in 2026, inflation hasn’t dipped below 2.4%, according to the U.S. Inflation Calculator. Middle-class Americans are struggling to cover essential costs of living – to the point that they’re cornered into cutting contributions to their retirement funds.
Recent research from Dayforce found that in 2025, retirement savings rates plunged to 8.9% – the first decline in three years, and quite a big one. More than one in four workers reduced their individual contributions. People making between $50,000 and $150,000 made the most cuts.
We’re cutting back right when we should be bulking up to build a healthy retirement fund. Most of us realize that $1 million won’t cut it in retirement. According to the Schroders’ 2026 U.S. Retirement Survey, the consensus is that $1.2 million is needed to retire comfortably. But the goal feels so steep from here and morale is low. Only 30% of those surveyed believe they will reach the $1 million milestone before retiring.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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