Here’s the Latest Retirement ‘Magic Number.’ Can You Reach It?

A new survey reaffirms an old paradox in retirement planning: American workers think they will need more than $1 million in savings to retire in comfort, but it’s a goal most of them don’t expect to meet.

Financial firms often poll American workers on the “magic number” of savings to fund a comfortable retirement. The latest survey comes from Schroders, the global asset management company.

Retirement savers surveyed this spring told Schroders they think they will need $1.2 million to retire in comfort.

Yet half of those surveyed said they expect to retire with less than $500,000 saved. One quarter said they expect to save less than $250,000. Only 30% expect to reach the $1 million milestone.

“Participants have that million-dollar goal, but many are on a half-million-dollar savings trajectory,” said Deb Boyden, head of U.S. defined contribution at Schroders.

The survey, released July 15, reached 1,500 investors, including 615 workplace retirement savers.

Is a Comfortable Retirement Out of Reach?

The report paints a bleak picture of retirement savings. That might seem counterintuitive, at a time when the stock market has been flirting with record highs.

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.

More than two-thirds of retirement savers surveyed by Schroders said they believe rising costs of health care, housing, insurance and utilities “have put retirement out of reach for their generation,” the report says.

More than half of savers said they are unable to set aside 10% of their salary for retirement because of competing financial priorities.

One-third of savers said their credit card debt exceeds their retirement savings.

More than one-quarter said they had borrowed from their retirement plans to pay down debts, cover financial emergencies or keep up with the rising cost of living.

“What the data is telling us is, retirement savings isn’t the only financial priority competing for attention,” Boyden said.

Retirement Savers Are Hoarding Cash

Retirement savers also reported keeping a sizeable share of their savings in cash, a choice that bespeaks mistrust in financial markets. Financial planners routinely advise most retirement savers to focus on two asset classes, stocks and bonds.

Here is how the savers surveyed by Schroders allocate their investments:

• Stocks, 27%
• Cash, 26%
• Bonds, 17%
• Target-date funds, 12%
• Private equity or credit, 12%
• Other, 6%

That breakdown suggests the surveyed savers have only about 56% of their money in stocks and bonds.

Schroders asked why those savers kept so much of their nest egg in cash. Here are the top three responses:

• “I am afraid of losing too much money if the stock market goes down,” 53%
• To diversify their investments, 44%
• To wait for the right time to buy stocks, 33%

Whatever the reasoning, financial advisers typically caution investors against keeping too much of their investments in cash, because a mix of stocks and bonds historically yields a better return.

“There’s a significant opportunity cost for waiting on the sidelines and sitting in cash,” Boyden said.

How Important Is the Retirement ‘Magic Number’?

The “magic number” ranks among the most popular topics in retirement savings in an era when American workers are tasked with saving for their own retirement.

A similar survey, published by Northwestern Mutual this year, put the magic number at $1.46 million.

Retirement experts caution, though, that any arbitrary savings goal is of limited use, more a guidepost than a hard target.

“The message is less about that magic number and more about planning and working toward those savings goals,” Boyden said.

Not many Americans retire with $1.2 million or $1.46 million in savings. The typical household in the 65-74 age range has about $200,000 in retirement accounts, according to the 2022 federal Survey of Consumer Finances.

Few, if any, retirement planners would suggest that every retiree needs $1 million to make ends meet. Most Americans retire with nowhere near that level of savings. Many retire comfortably on Social Security income alone.

A more attainable retirement planning goal suggests that you aim to save 10 times your annual income by age 67. For the typical American household, that would work out to a little over $800,000 in savings, based on a median household income of $83,730 in 2024.