A recent survey highlights a growing paradox in retirement planning: while American workers believe they need $1.2 million to retire in comfort, most remain on a trajectory that will not meet that goal. According to research released on July 15 by Schroders, which surveyed 1,500 investors including 615 workplace retirement savers, many participants are currently tracking toward a much lower half-million-dollar savings figure.
Deb Boyden, head of U.S. defined contribution at Schroders, noted that despite the clear million-dollar aspiration, retirement savings are constantly competing with other financial priorities. The economic landscape remains difficult, with many savers citing the cumulative impact of inflation on housing, health care, insurance, and utilities.
More than two-thirds of those surveyed expressed concern that these rising costs have effectively put a comfortable retirement out of reach for their generation.
Financial strain is evident across the board. Over half of the savers surveyed stated they cannot contribute 10% of their salary to retirement accounts because of immediate financial pressures. Furthermore, one-third of respondents reported that their credit card debt exceeds their total retirement savings, while more than one-quarter admitted to borrowing from their retirement plans to cover living expenses, emergencies, or debt repayment.
The survey also examined investment habits, finding that savers currently hold only about 56% of their assets in stocks and bonds. Financial advisers frequently warn that keeping too much of a nest egg in cash results in a significant opportunity cost, as a balanced portfolio of stocks and bonds has historically provided better returns.
When asked why they hold high levels of cash, savers cited a fear of market volatility, a preference for liquidity, and a general lack of confidence in investment strategies.
While another survey published this year by Northwestern Mutual placed the "magic number" even higher at $1.46 million, industry experts emphasize that such figures are arbitrary. The actual reality for most Americans is far more modest; the 2022 federal Survey of Consumer Finances indicates that the typical household aged 65-74 holds approximately $200,000 in retirement accounts.
Most people do not reach the million-dollar milestone, often relying on Social Security income to bridge the gap.
Instead of focusing on a specific, potentially unattainable number, experts like Boyden advise that the true priority should be consistent planning and working toward realistic, personalized savings goals, such as attempting to save 10 times one's annual income by age 67.
But Americans are also coping with years of cumulative inflation. A retiree in 2026 can expect to pay more than ever, for example, for long-term care expenses.
Here is how the savers surveyed by Schroders allocate their investments:
