Americans believe they will need $1.2 million saved to retire comfortably, but a large majority do not expect to get anywhere near that number. That is the finding of a new survey from global investment manager Schroders, reported by CNBC.
Just 30% of the workplace retirement plan participants surveyed said they think they will reach a $1 million savings mark before retiring. More than half, 51%, said they expect to have less than $500,000 saved when they reach retirement. That includes 24% who say they will have less than $250,000. The survey polled 1,500 investors between March and April.
Respondents pointed to rising costs, credit card debt, and competing expenses as the main reasons they expect to fall short. Notably, 33% said they have more credit card debt than retirement savings. Meanwhile, 55% said they are unable to save 10% of their paychecks toward retirement due to competing expenses. And 69% said rising costs have put retirement out of reach for their generation.
"Many investors are just struggling to turn their good intentions into long-term retirement readiness," said Deb Boyden, head of U.S. defined contribution at Schroders.
Some respondents have already taken concrete steps that reduce their future retirement balances. They have opted to reduce their plan contributions or borrow from their 401(k)s to meet other financial goals, such as reducing debt, paying for emergency expenses, or keeping up with rising living costs.
The $1.2 million figure from Schroders is not the only estimate circulating. Earlier this year, Northwestern Mutual found that $1.46 million is the threshold Americans say they need to retire comfortably in 2026. That figure climbed $200,000 from the year before. Schroders' estimate is down from $1.28 million in its prior survey. Financial planners caution that these figures are often more guesswork than precision.
"It's hard to save for a future that feels abstract when the present feels urgent," said Douglas Boneparth, a certified financial planner and president and founder of Bone Fide Wealth in New York.
Boneparth, who is also a member of the CNBC Financial Advisor Council, said rising costs and credit card debt are not excuses but reality. He said someone who saves consistently, works to reduce high-interest debt, and invests early "can close more ground than they think," even starting from a low balance. He also cautioned that the right retirement savings target varies widely by individual. "You may need more or significantly less," Boneparth said. "It depends."
