Americans Say They Need This Much Money to Retire

Americans Say They Need This Much Money to Retire
Photo by Rawpixel.com / Shutterstock.com

American workers say they need $1.7 million to retire. But many are at risk of falling short of that lofty goal.

Charles Schwab’s 2019 401(k) Participant Survey asked 1,000 workers ranging in age from 25 to 70 how much money they would need to retire.

On the low end, 4% of workers said they would need less than $100,000 to retire. At the other extreme, 1% of workers stated they would need $10 million or more.

However, 33% of workers — the largest percentage by far — said they would need between $1 million and just under $3 million.

The average of all the answers was $1.7 million. Yet, many workers are not saving enough money to reach that daunting level of savings.

In fact, 51% of survey respondents — all of whom have a 401(k) — admitted to saving 10% or less of their salary to a 401(k).

Median household income in the U.S. was $61,372 in 2017, according to the U.S. Census Bureau. A worker who saves 10% of that amount would contribute $6,137.20 to a 401(k) account every year.

Investing that money at a 7% return over a 40-year working lifetime would result in a nest egg of roughly $1.3 million. That is a lot of money, to be sure. But it’s still short of the amount workers say they need.

Save just 5% of that median income annually — $3,068.60 — and you’d end up with around $650,000 after 40 years.

Making sure you save enough for retirement

On a brighter note, the survey found that the average worker who participated in the survey contributed $8,788 to their 401(k) plan in 2018.

If those workers stay the course with that level of contribution and are willing to take a little risk with their money — for example, investing in the stock market — they might earn enough of a return to get to the $1.7 million savings goal.

The key to amassing such wealth is to start saving early and often. The more time your investments have to compound, the more likely you are to reach your financial goals.

Need help getting started? Consider enrolling in our retirement “boot camp” course, The Only Retirement Guide You’ll Ever Need.

Created by Money Talks News founder Stacy Johnson and designed for folks between the ages of 45 and 65, it is a 14-lesson course in everything you need to know about saving for retirement.

As Stacy has said before:

“At the end of the day, the amount we should all put aside for retirement is the most we can.”

You can read the chapter “Social Security Secrets” for free. If you like what you see — and we’re confident you will — enroll in the course.

Learn everything you need to plan your dream retirement

The Only Retirement Guide You'll Ever Need gives you the knowledge you need to retire on your own terms. Sure, you can pay a financial adviser, but this online course gives you total control to create a custom retirement plan around the things that make you happy.

You're going to get expert, personalized advice. You'll have access to the latest tools. And when it's complete, you'll be able to approach your retirement confidently and with peace of mind.

It's time to plan the best years of your life. Let's get started.

Popular Articles

16 Uses for WD-40 That Save Money, Time or Headaches
16 Uses for WD-40 That Save Money, Time or Headaches

WD-40 is handy in a lot more situations than you likely realize.

The Secret to Getting Dollar Store Items for Free
The Secret to Getting Dollar Store Items for Free

If you know where to look, you can score freebies at the dollar store regularly.

8 Restaurant Chains With Discounts for Diners Age 50 or Older
8 Restaurant Chains With Discounts for Diners Age 50 or Older

Some restaurant chains offer great senior discounts. Here’s what you need to know.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Trending Stories

Comments