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.
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 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:
Private equity or credit, 12%
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