Most U.S. Workers Expect to Fall Short of $1.1 Million Retirement Savings Goal

64% of Millennials and 62% of workers aged 45 and older said their workplace retirement plan will not reach the level they hope for.

Most working Americans worry a workplace retirement plan will not grow to the level they hoped to achieve, as expressed by 64% of Millennials and 62% of workers 45 and older.

The Schroders 2023 U.S. Retirement Survey surveyed 2,000 U.S. investors nationwide. Participants were ages 27 to 79 with a median household income of $75,000. Conducted by 8 Acre Perspective from February 13 to March 3, the research examined the retirement readiness of American workers.

Respondents ages 45 and older believed, on average, $1.1 million was the amount needed to retire comfortably. However, only 21% said they foresee saving at least $1 million. More than half (59%) said they expect to have less than $500,000, while 34% expect to save less than $250,000.

Among those 45 and older, 69% worried about money an average of 1.6 hours per day, which is 11 hours per week and the equivalent of 24 full days per year.

“The fact that, once again, so few Americans nearing retirement are confident they have enough money speaks volumes about the work we still need to do to make it easier for American workers to reach retirement security,” said Deb Boyden, head of U.S. defined contribution at Schroders, in the report accompanying the study.

Millennials reported $1.3 million as the amount it will take to achieve a comfortable retirement. Only 29% predict they will save at least $1 million, 49% expect to save less than $500,000 and 27% expect to save less than $250,000.

Millennials expressed more daily stress about money than older workers. Among Millennials, 85% worried about money an average of 1.9 hours per day, 13 hours per week and 28 full days per year.

Millennials were joined by older workers in their concern: 53% of workers 45 and up and 64% of millennials report concern that financial stress would negatively affect their overall health.

Older workers and Millennials had similar asset allocation of their retirement investments in 2022, placing the most investments in equities and cash. Both age groups put 31% of investment towards equities, while 29% of older workers and 33% of Millennials put their investments in cash.

Stock market volatility continues to be a concern, as 66% of older workers and 62% of working Millennials said they placed their investments in cash because they feared losing too much money if the stock market went down.