RIAs Say $1M in Retirement Savings Is not Enough

While $1 million is frequently referenced by Americans as a standard level of retirement savings for average families, a new survey finds most registered investment advisers (RIAs) do not agree.
Scottrade said its survey found 71% of RIAs do not believe $1 million is enough for the average American family to retire on. Most believe families need to be saving double, and in some cases more than triple, this amount for retirement, depending on age.

The recommended goals are the greatest for Generation Y (ages 18 to 26). More than three-quarters (77%) of RIAs suggested a goal of at least $2 million, and more than 40% believe that Generation Y should be targeting more than $3 million in retirement funds.

Nearly half of RIAs (46%) believe Generation X (ages 27 to 42) should at least double the $1 million goal and save between $2 and $3 million. Twenty-two percent suggest a goal of more than $3 million.

Thirty-five percent of RIAs say Boomers (ages 43 to 64) need between $2 million and $3 million to retire, and 13% believe Boomers need more than $3 million. Thirty percent recommend a retirement goal between $1.5 million and $2 million.

Seniors (ages 65+) are the only generation that may come close to only needing $1 million for retirement, according to the survey. Forty-four percent of RIAs indicate that $500,000 to $1.5 million is sufficient for average seniors. Only 20% of RIAs believe seniors need between $2 and $3 million.

The 2009 Registered Investment Advisor Study commissioned by Scottrade Advisor Services polled 226 registered investment advisers selected from the Discovery database from August 12 through September 30 (see “RIAs Pump up client Efforts”).