Can You Guess How Many Americans Successfully Retire With $1 Million Saved? The Percentage May Shock You (2024)

Jeannine Mancini

·4 min read

Can You Guess How Many Americans Successfully Retire With $1 Million Saved? The Percentage May Shock You (1)

Saving for retirement is an essential goal for many Americans, but achieving the ideal savings target remains elusive for many. In 2023, the average American retiree had about $170,726 in retirement savings, a decrease from $191,659 at the beginning of 2022. This 10% reduction is significantly lower than the recommended $555,000. Only 12% of retirees have achieved or exceeded this recommended savings amount.

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The Challenge Of Insufficient Retirement Savings

A startling 37% of retirees report having no retirement savings, an increase from 30% in 2022. This lack of savings is attributed to various factors, including unplanned early retirement because of health issues, as experienced by 65% of retirees. A significant portion of retirees — approximately 71% — carry non-mortgage debt averaging $19,888, which includes medical debts and other expenses.

Only a small fraction of retirees — around 8% to 10% — have successfully saved $1 million or more. This figure highlights the substantial challenges many face in reaching such a lofty savings goal, with the majority of retirees falling well short of this mark. This situation underscores the need for more effective retirement planning and saving strategies.

Factors Impacting Retirement Planning

The retirement landscape in the U.S. has been shaped by multiple factors. Notably, 65% of retirees stopped working earlier than planned, with health concerns being a major factor. This premature retirement often results in lower overall savings. High inflation rates in recent years also have significantly affected the value of retirement savings. As a result, 83% of retirees reported that inflation impacted their retirement savings, with many experiencing major financial impacts. This economic environment has compelled retirees to reassess their living expenses, with 44% struggling to afford necessities like groceries, housing, utilities and medical expenses.

Retirees have expressed various regrets regarding their retirement planning. A majority admit they did not prepare adequately, with 51% acknowledging their lack of sufficient preparation. Common regrets include a lack of understanding about retirement savings, poor money management before retirement and underestimating the amount needed for a comfortable retirement. Many retirees also wish they had been more aggressive with their investments earlier in life.

As a result of these financial challenges, retirees have had to make significant adjustments to their lifestyles. Approximately 45% report a decline in their standard of living since retirement, leading to reduced spending on nonessential items like entertainment, travel and dining out. Spending on essentials such as groceries, gasoline and healthcare has increased, reflecting the impacts of inflation.

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Strategies For Achieving A Comfortable Retirement

Given these findings, it’s clear that achieving a comfortable retirement requires careful planning, consistent saving and strategic investment decisions.

Here are key strategies to consider:

  • Start saving early. Begin retirement savings early in your career to take advantage of compound interest.

  • Make regular contributions, even if they are small, as they can accumulate significantly over time.

  • Focus on debt reduction. Aim to reduce or eliminate high-interest debts, such as credit card balances.

  • Consider paying off mortgages before retirement to decrease monthly expenses.

  • Consult with a financial adviser for personalized advice tailored to your financial situation and goals. Financial advisers can help in creating a diversified investment portfolio to manage risk and maximize returns.

  • Contribute the maximum amount to retirement accounts like 401(k)s and individual retirement accounts (IRAs) to take full advantage of tax benefits and employer matches.

  • Spread investments across various asset classes to reduce risk. Include stocks, bonds, real estate and other alternative investments like art, which has seen has seen a 13.8% annualized return, surpassing the 10.2% from the S&P 500​.

  • Regularly rebalance your portfolio to maintain the desired asset allocation.

  • Build an emergency fund to cover unexpected expenses. This prevents the need to withdraw from retirement savings prematurely.

  • Delay Social Security benefits. If possible, delay taking Social Security benefits until full retirement age or later to maximize the monthly benefit amount.

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This article Can You Guess How Many Americans Successfully Retire With $1 Million Saved? The Percentage May Shock You originally appeared on Benzinga.com

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Can You Guess How Many Americans Successfully Retire With $1 Million Saved? The Percentage May Shock You (2024)

FAQs

Can You Guess How Many Americans Successfully Retire With $1 Million Saved? The Percentage May Shock You? ›

Only a small fraction of retirees — around 8% to 10% — have successfully saved $1 million or more. This figure highlights the substantial challenges many face in reaching such a lofty savings goal, with the majority of retirees falling well short of this mark.

Can you guess how many Americans successfully retire with $1 million saved the percentage may shock you? ›

In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved.

Do Americans say they need $1.2 million to retire most aren't saving enough? ›

It would take $1.46 million to retire comfortably, according to a recent survey of 4,588 adults released Tuesday by financial-services company Northwestern Mutual. That is up from $1.27 million a year ago. And over $1 million more than the average survey participant's nest egg.

What percentage of Americans have saved enough for retirement? ›

The bottom line

According a 2023 Fidelity report, Americans on average have saved only 78% of the amount they'll need in retirement, and 52% of U.S. households may not be able to pay for essential expenses in retirement. Fidelity Investments.

Is $1 million enough to retire? ›

How long will $1 million in retirement savings last? In more than 20 U.S. states, a million-dollar nest egg can cover retirees' living expenses for at least 20 years, a new analysis shows. It's worth noting that most Americans are nowhere near having that much money socked away.

How many Americans have $1 million saved for retirement? ›

If you have more than $1 million saved in retirement accounts, you are in the top 3% of retirees. According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.

Can you retire $1.5 million comfortably? ›

Most retired Americans believe they will need nearly $1.5 million in the bank to retire comfortably, according to a new study. The majority of retirees surveyed believe that they will need $1.46 million in the bank to retire comfortably, according to Northwestern Mutual's 2024 Planning & Progress Study.

Can I retire at 55 with $1 million? ›

While retiring at 55 with $1 million may be possible, it requires planning and a watchful financial eye. "Most people are living into their 90s, so the $1 million will have to last 35-plus years," says Aviva Pinto, managing director of Wealthspire Advisors in New York City.

Can you retire with $1 million dollars at 30? ›

Is it possible to retire at 30 with $1 million? Yes. But the odds are it's likely that it will do more harm than good. If you have $1 million at age 30, you're doing beyond great.

How long would it take to retire with at least $1 million? ›

1. Retiring with at least $1 million would take 20 years if you invest $1,316.88 monthly at 10% compounded interest. 2. You could retire at 45 years if you invested at age 25.

What is the average 401k balance at age 65? ›

Average and median 401(k) balances by age
Age rangeAverage balanceMedian balance
35-44$76,354$28,318
45-54$142,069$48,301
55-64$207,874$71,168
65+$232,710$70,620
2 more rows
Mar 13, 2024

What percent of Americans have $1 million in savings? ›

This number has been cited so often that investors may feel as if they're failing if they don't reach it. But that shouldn't be the case. In fact, statistically, just 10% of Americans have saved $1 million or more for retirement.

What is the average Social Security check? ›

Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.

Can you live off the interest of $1 million dollars? ›

Historically, the stock market has an average annual rate of return between 10–12%. So if your $1 million is invested in good growth stock mutual funds, that means you could potentially live off of $100,000 to $120,000 each year without ever touching your one-million-dollar goose. But let's be even more conservative.

How much money do most people retire with? ›

Key findings
  • In 2022, the average (median) retirement savings for American households was $87,000.
  • Median retirement savings for Americans younger than 35 was $18,800 as of 2022.
  • 62% of Americans aged 18 to 29 have some retirement savings, but only 30% percent feel on track for retirement.
Mar 18, 2024

How long will 1 million last in retirement with Social Security? ›

For retirees in California, the annual cost of living expenses would be $72,319.57, meaning a $1 million retirement fund would last for about 14 years. Retirement can often last 25 years or more, according to Fidelity.

How much money does the average American have when they retire? ›

The above chart shows that U.S. residents 35 and under have an average of $30,170 in retirement savings; those 35 to 44 have an average $131,950; those 45 to 54 have an average $254,720; those 55 to 64 have an average $408,420; those 65 to 74 have an average $426,070; and those over 70 have an average $357,920.

How much does the average 70 year old have in savings? ›

The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately: $60,000 in transaction accounts (including checking and savings) $127,000 in certificate of deposit (CD) accounts.

What is the average net worth of retirees in the US? ›

The most recent report released in September 2020 (using data collected in 2019) shows the median U.S. household net worth is $121,700 — but it's more than double that for people ages 65 to 74. According to the Fed data, the median net worth for Americans in their late 60s and early 70s is $266,400.

How many Americans have zero saved for retirement? ›

As many as 28% of Americans have nothing saved for their retirement, 39% aren't contributing to a retirement fund and another 30% don't think they'll ever be able to retire. That's according to a new GoBankingRates survey. Between 25% and 35% of all demographics between the ages of 18...

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