Americans saving for retirement in 401(k) plans believe they will need $1.2 million on average to retire comfortably, according to newly published findings from the Schroders 2024 U.S. Retirement Survey.
Nearly half (46%) expect to have less than $500,000 in savings by the time they are ready — or required — to leave the work force, while 23% say they will likely have less than $250,000 put away for life after work.
Just 29% believe they will reach the $1 million mark before retiring, according to Schroders, and the average age at which plan participants expect to retire is 63.
The difference between how much money savers say they need to live comfortably and how much they expect to have saved is "miles apart" for most retirement savers, said Deb Boyden, head of U.S. defined contribution at Schroders.
"While the magic retirement savings number is over $1 million for many plan participants, they are not saving or investing correctly to reach this goal," Boyden said. "Without better planning and a roadmap to close the savings gap, a comfortable retirement will be out of reach."
The savings goal identified in a new Schroders survey, while high, is actually lower than some prior studies, including a Northwestern Mutual survey from earlier this year that pinned the number at $1.5 million.
Emotions Are Driving Decisions for Many
The survey findings suggest that many who are striving to reach their retirement goals are not investing optimally, relying instead on their emotions to inform their portfolio management decisions.
