Americans Set $1.2 Million Retirement Benchmark, But Most Expect to Fall Short
A survey by global asset manager Schroders reveals that Americans believe they need an average of $1.2 million in savings to retire comfortably, but most anticipate falling far short of that goal. The findings, based on responses from 1,500 investors aged 30-79, highlight a stark disparity between retirement aspirations and financial realities. Only 30% of the 615 workplace retirement savers surveyed expect to reach the $1 million milestone, while 51% anticipate retiring with less than $500,000 saved. The survey, released July 15, underscores a growing gap between the perceived financial requirements for retirement and the savings Americans are likely to accumulate.
Survey Details: 1,500 Investors Highlight Savings Gaps
The Schroders 2026 U.S. Retirement Survey, conducted between March 20 and April 15, included 1,500 investors, with 615 participating in workplace retirement plans. Among these participants, 33% reported having more credit card debt than retirement savings, and 55% said they cannot save 10% of their income for retirement due to competing financial priorities. Additionally, 69% of workplace savers believe rising costs have made retirement unattainable for their generation. Deb Boyden, head of U.S. defined contribution at Schroders, noted that while many Americans set a $1 million savings target, their current trajectories suggest they will fall well short. Participants have that million-dollar goal, but many are on a half-million-dollar savings trajectory,
she said.
Rising Costs and Debt Strain Retirement Readiness
Financial pressures, including inflation and debt, are compounding challenges for retirement planning. Over two-thirds of savers surveyed by Schroders cited rising healthcare, housing, insurance, and utility costs as barriers to retirement. Nearly a quarter of workplace savers have borrowed from their retirement plans to cover emergencies or living expenses, while 33% have credit card debt exceeding their retirement savings. The survey also found that 55% of savers cannot allocate 10% of their paycheck to retirement, reflecting the prioritization of immediate financial needs over long-term planning.
The “Magic Number” Debate: A Guide, Not a Mandate
A similar survey by Northwestern Mutual estimated $1.46 million as the threshold for comfortable retirement, reflecting the impact of inflation and cost-of-living fluctuations. However, financial planners emphasize that these figures are approximations. Douglas Boneparth, a certified financial planner, noted that the message is less about that magic number and more about planning and working toward those savings goals.
He advised focusing on consistent savings habits rather than arbitrary targets, as individual needs vary based on location, lifestyle, and retirement timing.
Investment Choices and Financial Habits Under Scrutiny
Retirement savers are also grappling with investment strategies, with 26% of workplace plan participants keeping a significant portion of their savings in cash. This allocation—27% in stocks, 26% in cash, 17% in bonds, and 12% in target-date funds—reflects a preference for liquidity over growth. Nearly 53% of respondents cited fear of market losses as a reason for holding cash, while 44% sought diversification. Financial advisers warn that excessive cash holdings can reduce long-term returns. Boyden emphasized that excessive cash can lead to a meaningful opportunity cost
for those with long-term horizons. Meanwhile, 24% of participants admitted ignorance about how their retirement savings were invested, highlighting a need for greater financial literacy and guidance through workplace plans or certified advisors.
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