Saving $1 million (or more) for retirement is a great goal to have. Putting that much aside could make it easier to live your preferred lifestyle when you retire, without having to worry about running short of money. However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved. If you’re looking to be in the minority but aren’t sure how to get started on that savings goal, consider working with a financial advisor.
What Does the Average Retiree Have Saved?
The Federal Reserve’s Survey of Consumer Finances tracks retirement savings data for different age groups in the U.S. According to the most recent survey that was completed in 2019, the average retirement savings by age breaks down like this:
- $426,000 for those aged 65 to 74
- $357,000 for those aged 75 and older
As you can see, those numbers are well below the $1 million mark. They represent how much the average person 65 and up have saved in retirement accounts, including 401(k) plans and Individual Retirement Accounts (IRAs).
If you look at median figures, the numbers change even more. The median represents the middle number in a group of numbers. The Federal Reserve data shows that 65 to 74-year-olds have a median of $164,000 in their retirement accounts while those 75 and older have $83,000 saved for retirement.
These numbers are from 2019 and may not reflect any retirement gains (or losses) retirees have experienced in the last few years. The next Survey of Consumer Finances is set to be released sometime in 2023 and it may paint a very different picture of retiree savings with the impacts of the COVID-19 pandemic and higher inflation factored in.
What Is the Average Retiree’s Net Worth?
Net worth is a measurement of your assets against your liabilities. A higher net worth indicates that you have more assets than debts and that’s a good thing when it comes to retirement.
In terms of the average retiree’s net worth, the Federal Reserve data puts it at approximately $1.2 million for those aged 65 to 74. The average net worth drops to $958,000 for those aged 75 and older. The data measures a variety of assets and debts, including:
- Retirement accounts
- Bank account balances
- Certificate of deposit accounts
- Savings bonds
- Stock holdings
- Cash value life insurance
- Managed assets
- Business equity
- Unrealized capital gains
- Primary mortgage debt
- Home equity loans and lines of credit
- Student loans
- Vehicle loans
- Credit cards
- Other installment debt
If you’d like to calculate your own net worth, you’d simply add up all of your assets and subtract your debts. You can use that number as a guide for measuring your own net worth alongside other Americans in your age group.
Is $1 Million Enough for Retirement?
Financial experts have long advocated saving at least $1 million for retirement. Whether $1 million is enough can depend on:
- Your desired retirement age
- How long do you expect to live in retirement
- Your preferred retirement lifestyle
- What you expect to spend on basic living expenses and healthcare
- When you plan to take Social Security benefits
For some retirees, $1 million may be more than enough to enjoy a comfortable lifestyle. Retirees who plan to relocate to another country, for example, may find that $1 million goes much further when it comes to paying for housing, utilities, food or health care. They might be able to retire on $500,000 instead.
On the other hand, $1 million may leave you with a savings gap if you would like to live a retirement lifestyle that includes plenty of travel, expensive hobbies or providing financial support to a child or grandchild. Health care can also take a big bite out of your savings if you have a chronic illness or you require long-term care at some point.
Long-term nursing care is generally not covered by Medicare. While you can apply for Medicaid to pay for long-term care, eligibility is determined by your assets. If your net worth is too high, you may have to spend down some of your assets before you can qualify. Purchasing long-term care insurance or a hybrid life insurance and long-term care policy can help you to prepare financially for that scenario.
How to Save $1 Million for Retirement
If you’d like to save $1 million or more for retirement, you’ll need a clear plan to reach your goal. Planning starts with doing some math to determine how much you need to save monthly or yearly to reach your goal, based on when you plan to retire.
Say, for example, that you’re 30 years old. You’d like to retire at 65 with $1 million saved. You make $70,000 a year, pre-tax and are starting with $0 in savings. Assuming you’re investing and earning a 7% annual rate of return on average, you’d need to set aside 10% of your income each year. That also assumes you plan to live until age 95 and spend $2,900 a month in retirement.
If you’re saving 10% of your pretax income each year, that works out to $583 per month. Now, what if you’re starting at age 35 instead? In that case, you’d need to bump your savings rate to 15% of your income or $850 a month instead.
Using an online retirement savings calculator can help you work out how much you need to save to retire with $1 million. You can also try some of these tips to boost your savings total:
- Enroll in your 401(k) if you haven’t already and aim to contribute at least enough to get your full employer match.
- Increase your 401(k) annual contribution rate by the same amount as any annual raises you receive.
- Max out your workplace retirement plan each year if possible and consider opening a solo 401(k) or SEP IRA if you’re self-employed.
- Supplement savings with a traditional or Roth IRA and a Health Savings Account (HSA), if you have one available through your high-deductible health plan.
- Take advantage of the Retirement Saver’s Credit if you’re eligible, which can free up more money that you can save.
- Choose low-fee investments to maximize your returns and review the fees you’re paying in your 401(k) or IRA regularly.
- Use found money, such as tax refunds or rebates, to add to your retirement savings.
- Fine-tune your budget as much as possible and pay down debt so you have more money to save.
Those are just a few things you can do to increase your savings efforts if you’d like to retire with $1 million. What you decide to do should be unique to what your individual financial goals are and how much money you think you need for your goals. You may benefit from working with a professional who can outline what a plan looks like to hit your individual goals.
The Bottom Line
The majority of retirees are not millionaires but it’s possible to reach $1 million in savings if you’re strategic in your approach. Getting an early start can be one of the best ways to reach your goal, as you’ll have more time to benefit from compounding interest. Comparing different investment options and understanding your risk tolerance is also essential if you’d like to achieve millionaire status by the time you retire.
Retirement Planning Tips
- Consider talking to a financial advisor about whether retiring with $1 million is realistic or if you should be aiming for a different savings number. If you don’t have a financial advisor yet, finding one doesn’t have to be difficult. SmartAsset’s free tool matchesyou with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you expect Social Security benefits to be part of your retirement picture, it’s important to understand how much you might be able to collect. You can receive your full benefit amount when you retire at your normal retirement age, but it’s possible to take benefits as early as 62. Doing so, however, can shrink the amount you’re able to receive. On the other hand, you can increase your benefit amount by waiting until age 70 to apply. Deciding when to take Social Security benefits is another topic you may want to discuss with your financial advisor.
Photo credit: ©iStock.com/Chinnapong, ©iStock.com/co*kada, ©iStock.com/alfexe
Rebecca Lake, CEPF® Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
FAQs
Only about 1 in 10 retirees have even $1 million saved, according to the Federal Reserve's Survey of Consumer Finances. If more than 90 percent of people can retire with far less than $2.5 million, it's likely that will be enough for you.
How many people have $10000000 in savings? ›
There are somewhere around 97,287 households with $50,000,000 or more in net worth. With $100,000,000? Somewhere around 34,507. That's somewhere around .
What percentage of retirees have $500,000 in savings? ›
In 2019, about 50% of households reported any savings in retirement accounts. Twenty-one percent had saved more than $100,000, and 7% had more than $500,000. These percentages were only somewhat higher for older people. Those ages 51 to 55 were the most likely to have a retirement account.
What is the average balance at retirement? ›
Investment firm Vanguard analyzed data from about 5 million retirement accounts as part of its How America Saves report. According to the latest findings, the average 401(k) balance was $141,542 in 2021. That's an increase of about 10% from 2020.
What is a high net worth retirement? ›
What is Considered a High Net Worth in Retirement? A high-net-worth individual or HNWI is generally anyone with at least $1 million in cash or assets that can be easily converted into cash, including stocks, bonds, mutual fund shares and other investments.
How many Americans have $1000000 in retirement savings? ›
In fact, statistically, around 10% of retirees have $1 million or more in savings.
What percent of Americans have a net worth of $10000000? ›
Around 1,456,336 households in America have $10 million or more in net worth. That's 1.13% of American households.
What percentage of Americans have $100000 for retirement? ›
14% of Americans Have $100,000 Saved for Retirement
Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.
How much do most people retire with? ›
The Federal Reserve's most recent data reveals that the average American has $65,000 in retirement savings. By their retirement age, the average is estimated to be $255,200.
What is the average 401k balance at age 65? ›
Average and median 401(k) balance by age
| Age | Average Account Balance | Median Account Balance |
|---|
| 35-44 | $97,020 | $36,117 |
| 45-54 | $179,200 | $61,530 |
| 55-64 | $256,244 | $89,716 |
| 65+ | $279,997 | $87,725 |
2 more rowsJan 20, 2023
You're approaching the finish line once you've reached age 60. At this point, your net worth should be equal to about six times your annual salary. Again, though, it's important to remember that general recommended targets may not be in line with what you need for the retirement you're envisioning.
What is the average Social Security check? ›
According to the Social Security Administration (SSA), the average monthly retirement benefit for Security Security recipients is $1,781.63 as of February. Several factors can drag that average up or down, but you have the most control over the biggest variable of all — the age that you decide to cash in.
What is the average 401k balance for a 70 year old? ›
The average 401(k) balance by age
| Age | Average 401(k) balance | Median 401(k) balance |
|---|
| 50-55 | $161,869 | $43,395 |
| 55-60 | $199,743 | $55,464 |
| 60-65 | $198,194 | $53,300 |
| 65-70 | $185,858 | $43,152 |
5 more rowsIt's long been a rule of thumb that you should have $1 million saved before you retire — and you may actually need to have close to double that in many cases. But most retirees have far less. A recent survey conducted by Clever found that, on average, retirees have just $170,726 saved for retirement.
Are most retirees millionaires? ›
The majority of retirees are not millionaires but it's possible to reach $1 million in savings if you're strategic in your approach. Getting an early start can be one of the best ways to reach your goal, as you'll have more time to benefit from compounding interest.
What net worth is considered extremely wealthy? ›
You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth. That's how financial advisors typically view wealth.
At what age should you have $1 million in retirement? ›
A recent analysis determined that a $1 million retirement nest egg may only last about 20 years depending on what state you live in. Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.
What a $1 million retirement really looks like? ›
Once a symbol of extravagant wealth, $1 million is now the retirement-savings goal for millions of Americans. For retirees able to accumulate $1 million in savings, the funds translate into inflation-adjusted income of $40,000 in the first year of a three-decade retirement using the 4% spending rule.
How many people have $1 million in 401k? ›
The 442,000 millionaire mark in 2021 was a peak since the first 401(k) plan was first established in 1978 but the year that followed was a very uncertain one and so many people saw significant drops to their accounts. The number of individual retirement account (IRA) millionaires also dropped by 25% to 280,320 in 2022.
Does net worth include home? ›
However, one measure that many overlook is net worth. Your net worth represents how much wealth you have, measured by assets like a house, cars, 401(k), jewelry or cash in the bank, minus the debt obligations you have, or what you owe.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
What is the net worth of upper class people? ›
How much money do you need to be considered rich? According to Schwab's 2022 Modern Wealth Survey, Americans believe it takes an average net worth of $2.2 million to qualify a person as being wealthy. (Net worth is the sum of your assets minus your liabilities.)
How much wealth does the average American retire with? ›
Experts advice to have 10x of your annual salary saved by retirement age at 65. The average person aged 65-74 has $1,217,700 in net worth. The median net worth is $266,400.
How many people are millionaires at retirement? ›
The number of 401(k) millionaires in Fidelity-managed plans is relatively small, just shy of 1.4 percent out of 21.5 million accounts. That segment peaked in 2021, at 442,000, with a median balance of $1.3 million, according to Mike Shamrell, vice president for workplace thought leadership for Fidelity.
How many Americans have no retirement savings? ›
More than ever, Americans who desire a “comfortable” retirement must squirrel away money in a retirement account. Yet nearly half of private-sector employees, 57 million Americans, have no option to save for retirement at work.
What percentage of retirees have a mortgage? ›
Across those 50 metros, an average of about 19% of homeowners who are 65 and older still have a mortgage. We also found that homes owned by people in this age group tend to be less valuable than those owned by the general population — and that their monthly housing costs tend to be lower.
What is the average age most retire? ›
Among those looking ahead to retirement, many expect to step away from work at age 65, according to the 2023 Retirement Confidence Survey. Although 65 is the anticipated median retirement age, workers report retiring at a median age of 62, the survey found.
Is $1,000,000 enough to retire at 65? ›
Will $1 million still be enough to have a comfortable retirement then? It's definitely possible, but there are several factors to consider—including cost of living, the taxes you'll owe on your withdrawals, and how you want to live in retirement—when thinking about how much money you'll need to retire in the future.
What is a good 401k amount to retire? ›
By age 50, you should have six times your salary in an account. By age 60, you should have eight times your salary working for you. By age 67, your total savings total goal is 10 times the amount of your current annual salary. So, for example, if you're earning $75,000 per year, you should have $750,000 saved.
How much money do you need to retire with $100000 a year income? ›
This means that if you make $100,000 shortly before retirement, you can start to plan using the ballpark expectation that you'll need about $75,000 a year to live on in retirement. You'll likely need less income in retirement than during your working years because: Most people spend less in retirement.
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
What is the average age of millionaires? ›
How old is the average millionaire? The average millionaire is 57 years old. This is because it takes smart financial decisions, hard work, and wise investments to become a millionaire, most of which don't fully pay off until around the age of 50 or 60.
How do I get the $16728 Social Security bonus? ›
To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.
How much Social Security if I average 100000 a year? ›
If your highest 35 years of indexed earnings averaged out to $100,000, your AIME would be roughly $8,333. If you add all three of these numbers together, you would arrive at a PIA of $2,893.11, which equates to about $34,717.32 of Social Security benefits per year at full retirement age.
What is the highest Social Security check per month? ›
In 2023, the average senior on Social Security collects $1,827 a month. But you may be eligible for a lot more money than that. In fact, some seniors this year are looking at a monthly benefit of $4,555, which is the maximum Social Security will pay. Here's how to score a benefit that high.
How many people have $3,000,000 in savings? ›
1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.
What is the average net worth of a senior citizen? ›
Between 35 to 44, the average net worth is $436,200, while between 45 to 54 that number increases to $833,200. Average net worth cracks the $1 million mark between 55 to 64, reaching $1,175,900.
Is $2 million enough to retire at 70? ›
Yes, retiring at 70 with $2 million in the bank is possible. It will require diligent planning and a good hard look at your expenses in retirement. If you plan ahead, you should be able to enjoy your retirement to the fullest.
What is the #1 regret of retirees? ›
Retirees' biggest regret is that 'they did not start saving early enough': Expert. Allspring Global Investments Head of Retirement Nate Miles breaks down the macro challenges impacting retirees, retirement savings trends, auto-enrolling into plans, and the different sentiments between men and women retirees.
Do rich retirees get Social Security? ›
Although to some degree it might seem as if billionaires and millionaires in the U.S. shouldn't be collecting Social Security, the truth is there is no law against it, and mathematically it makes sense. Social Security isn't simply a welfare program, with money handed out to anyone who asks.
Someone is considered a millionaire when their net worth, or their assets minus their liabilities, totals $1 million or more.
What is a respectable net worth? ›
A common rule of thumb for determining what your net worth should be at any given age is to divide your age by 10, then multiple that by your gross annual income. So if you're 40 years old making $100,000 a year then you should have a net worth of $400,000.
Is a million dollars a lot of money? ›
On the one hand, $1 million is a vast sum of money. According to the New York Times, having $1 million puts you in nearly the 90th percentile of household wealth in the U.S. (the 50th percentile is $127,000).
What percentage of population has $100000 in savings? ›
More than one in 10 Americans do not have any savings
Almost one in ten men have $100,000 or more in savings, but the figure falls by four percentage points for women (9% men vs. 5% women).
How many people have $1000000 cash? ›
There are about 62.5 million millionaires globally, a 11.4% increase from 2020.
How much does top 1% have in savings? ›
The top 1 percent of earners have a median balance of $1.13 million across various types of banking and retirement savings accounts. When you look at the average account balance, that number is even higher: $2.5 million. The bottom 20 percent, on the other hand, have an average of $8,720 saved and a median of $0.
What is the top 1% savings amount? ›
Compare that to the average household in the top 1 percent, which has close to $2.5 million in savings. These are averages, remember. If we look at medians, or the middle values of savings accounts, these numbers change dramatically. According to MagnifyMoney, the median American household has only $11,700 in the bank.
How many Americans have $300,000 in savings? ›
What's better, the 2018 Retirement Savings assessment shows 16 percent of Americans have $300,000 or more saved; 10 percent have $200,000 to $299,999; and 12 percent have $100,000 to $199,999. Twenty percent of survey respondents report having somewhere between $10,000 and $100,000 in their nest egg so far.
How much do most Americans have saved at retirement? ›
According to their latest figures, the average workplace retirement plan has a balance of more than $141k. Here are the average and median balances by income level and age: No surprises here. The higher the income level and age the higher the balance.
Is $1000000 considered wealthy? ›
Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
The number of 401(k) millionaires in Fidelity-managed plans is relatively small, just shy of 1.4 percent out of 21.5 million accounts. That segment peaked in 2021, at 442,000, with a median balance of $1.3 million, according to Mike Shamrell, vice president for workplace thought leadership for Fidelity.
How many Americans have $2 million in savings? ›
As of the end of 2020, there were nearly 22 million people in the US who had a net worth of $2 million or more.
What is the average monthly retirement income? ›
Average Monthly Retirement Income
According to data from the BLS, average incomes in 2021 after taxes were as follows for older households: 65-74 years: $59,872 per year or $4,989 per month. 75 and older: $43,217 per year or $3,601 per month.
Who gives 5% on savings? ›
5% APY savings account
12 Months: Bread Savings – 5.20% APY. 27 Months: Sallie Mae – 5.15% APY. 3 Years: Ibexis Fixed Annuity – Up to 5.00% APY. 5 Years: Americo Fixed Annuity – Up to 5.25% APY.
How many Americans have more than $1,000 savings? ›
Just 45% of all Americans have $1,000 or more in savings. These were the savings account balances as of the third quarter of 2022.
How much does the average American have in their bank account? ›
How much do you currently have in your savings account? For nearly a third of average Americans, this number is $100 or less. GOBankingRates recently surveyed 1,000 Americans ages 18 and older to learn more about their banking practices and found that 32.9% have no more than $100 in their savings account.
