A recent survey conducted by Schroders highlights a growing disconnect between the financial aspirations of American workers and their actual savings progress. Released on July 15, the survey of 1,500 investors, which included 615 workplace retirement savers, found that participants believe they require $1.2 million to retire in comfort.
However, many of these individuals are currently on a trajectory to save only half that amount.
Deb Boyden, head of U.S. defined contribution at Schroders, noted that while the million-dollar figure remains a clear goal for participants, their current savings pace does not align with that target. This outlook appears particularly challenging given the current economic climate; although the stock market has recently approached record highs, many Americans are struggling with the cumulative effects of years of inflation.
According to the report, more than two-thirds of those surveyed believe that the rising costs of health care, housing, utilities, and insurance have effectively put retirement out of reach for their generation.
Financial hurdles are widespread, with more than half of the savers stating that competing financial priorities prevent them from setting aside 10% of their salary for retirement. Furthermore, one-third of respondents reported that their credit card debt exceeds their total retirement savings, while more than one-quarter have resorted to borrowing from their retirement plans to cover emergencies, debts, or daily living expenses.
Boyden emphasized that retirement savings is just one of many financial priorities competing for attention.
The data also revealed that surveyed savers hold only about 56% of their assets in stocks and bonds, with a significant portion kept in cash. Financial advisers generally discourage such high cash allocations due to the opportunity cost of missing out on the historically better returns of a diversified stock and bond portfolio.
A separate survey published by Northwestern Mutual earlier this year estimated the "magic number" for retirement at $1.46 million.
Experts stress that these figures should be viewed as guideposts rather than strict requirements. The typical household in the 65-74 age range currently has approximately $200,000 in retirement accounts, according to the 2022 federal Survey of Consumer Finances. Rather than focusing on an arbitrary target, Boyden suggests that the message is about consistent planning and working toward individual goals.
Many Americans successfully retire on Social Security income alone, and a more practical benchmark often suggested is saving 10 times one's annual income by age 67. Based on the 2024 median household income of $83,730, this would equate to roughly $800,000 in savings.
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:
