Americans currently participating in a workplace retirement plan say they will need $1.28 million saved before leaving the workforce to live comfortably, according to a recent survey.

Schroders’ 2025 U.S. Retirement Survey found that, despite this seven-figure savings goal, 26% of retirement plan participant who responded said they expect to have less than $250,000 saved by retirement, and 48% said they expect to have less than $500,000, while only 30% believe they will reach the $1 million milestone before retirement.

Faced with this significant gap in savings, 81% of retirement plan participant respondents said they are slightly worried about outliving their retirement assets, and 69% reported that their plans are their most single important asset, according to the survey.

Despite this significance, the survey found that only 20% of plan participants said they use their plan’s automatic escalation feature, which increases their retirement plan contribution percentage at set intervals.

Notably, 19% of plan participants said they have decreased their plan contributions, and 61% of those said they did so in the past two years.

Further, 17% of all participants reported that they have borrowed money from their plan. Plan participants’ most common reasons for taking loans from a retirement account included paying for unforeseen family or personal emergencies (29%), paying down credit card or other debt (25%), and keeping up with increasing inflation (22%).

Comfort of Cash

Almost one-third (31%) of retirement plan participants surveyed admitted to not knowing how their retirement assets are allocated. Among those that do know, allocations across all retirement investments “suggest that loss aversion may be shaping their decision-making.”

For the group of respondents who said they were in the know about their allocations, 31% of their investments were in equities, 23% in cash, 16% in fixed income, 14% in target-date funds and 16% in other categories, according to survey.

When asked about their reasoning for allocating retirement savings to cash, the survey found that “the certainty of the asset class” was the most-cited reasoning. Specifically, 53% of retirement plan participants mentioned a fear of losing too much money in the event of a market downturn, 47% said they did so to diversify their investments and 23% said they were unsure of how to best invest cash holdings.

Deb Boyden, Schroders’ head of U.S. defined contribution, said in a statement that if an individual is at least five years away from retiring, holding a “modest” amount of cash could be advantageous for tactical investment opportunities, but warned of keeping more than that.

“Holding one-quarter of your portfolio in cash comes with a steep opportunity cost,” Boyden said in the statement. “Shifting these savings into investments that are designed to deliver better returns than cash while minimizing market downturns can help you accumulate wealth more efficiently and narrow any savings gaps.”

Impact of Financial Stress

Financial stress was also another concern for retirement plan participants who responded to the survey, with the majority (65%) reporting they worry too much about money, and more than half (56%) worried about financial stress negatively affecting their health.

On average, 53% of retirement plan participant respondents said they spend at least an hour per day worrying about money.

The survey included 1,500 U.S. investors, ranging in age from 29 through 79, including 602 currently participating in a workplace retirement plan.