Majority of Workers Unlikely to Reach $1 Million Retirement Goal, Survey Finds

Despite expecting to need over $1 million for a comfortable retirement, only 30% of U.S. workers believe they will reach that milestone, according to a new survey by investment firm Schroders. The findings highlight a widespread shortfall in retirement preparedness and outline several expert strategies to help workers boost their savings.

The Schroders survey, conducted between March and April, polled 1,500 investors, including 602 retirement plan participants. On average, respondents said they would need $1.28 million to retire comfortably. However, just 30% expect to reach or exceed the $1 million mark, while nearly half — 48% — anticipate having less than $500,000. About 26% foresee having under $250,000 saved by retirement.

These findings echo concerns raised by other studies, including one by the Transamerica Center for Retirement Studies, which reported that 68% of workers fear they could work until retirement and still not save enough.

Person counting money | Source: Pexels

“People think here and now, ‘I need that money to cover whatever expense that is hitting at this point,’” said Deb Boyden, head of U.S. defined contribution at Schroders, addressing the challenge of balancing present needs with future goals.

Experts recommend several strategies to improve retirement outcomes:

• Increase the savings rate: A savings rate of 12% to 15% of pay, including employer contributions, is generally considered ideal. In 2024, the average combined 401(k) savings rate stood at 12%, according to Vanguard.
• Avoid early withdrawals: About 17% of workers have borrowed from their retirement plans, often for emergencies or debt repayment. Such moves can erode long-term gains.
• Invest wisely: Experts advise against holding too much retirement savings in cash. Nearly a third of respondents were unaware of how their funds were invested, with 23% of known allocations held in cash.

Person counting money | Source: Pexels

Boyden advised workers to reassess their investment strategies quarterly and keep long-term goals in mind when making financial decisions.