Americans Say They Need $1.2 Million to Retire Comfortably. Most Don’t Think They’ll Ever Get There

Americans believe they need about $1.2 million to retire comfortably, but a growing number doubt they will ever reach that goal as inflation, debt and day-to-day expenses continue to squeeze household budgets.

A new survey from global investment manager Schroders found that while workers recognize the importance of building retirement savings, many expect to fall well short of the amount they believe they will need. The survey, conducted among 1,500 workplace retirement plan participants between March and April, highlights a widening gap between retirement expectations and financial reality.

Only 30% of respondents said they believe they will accumulate at least $1 million before they retire. Meanwhile, 51% expect to have less than $500,000 in retirement savings, including 24% who anticipate retiring with under $250,000.

According to the survey, rising living costs remain the biggest obstacle. Nearly 69% of respondents said inflation and higher everyday expenses have pushed a comfortable retirement further out of reach for their generation.

Debt is also weighing heavily on retirement planning. About one-third (33%) of participants reported carrying more credit card debt than they currently have saved for retirement, while 55% said they are unable to contribute at least 10% of their paychecks toward retirement because other financial obligations take priority.

“Many investors are just struggling to turn their good intentions into long-term retirement readiness,” Deb Boyden, head of U.S. defined contribution at Schroders, told CNBC. For many households, retirement savings have become one of the first financial goals to be sacrificed when budgets tighten.

Survey respondents said they have reduced contributions to workplace retirement plans or even borrowed from their 401(k) accounts to pay down debt, cover emergency expenses, or keep pace with higher living costs.

Earlier this year, Northwestern Mutual found that Americans believe they need $1.46 million to retire comfortably in 2026, up roughly $200,000 from the previous year. By comparison, Schroders’ estimate of $1.2 million is actually lower than its own prior survey, when respondents estimated they would need $1.28 million.

Financial experts caution, however, that these figures should not be viewed as universal benchmarks. Douglas Boneparth, a certified financial planner, founder of Bone Fide Wealth and member of the CNBC Financial Advisor Council, said focusing on a single retirement number can become discouraging, especially for workers who are just beginning to save.

“It’s hard to save for a future that feels abstract when the present feels urgent,” Boneparth said. Instead of chasing what he described as a “magic” retirement number, Boneparth recommends concentrating on consistent financial habits, including saving regularly, paying down high-interest debt, and investing as early as possible.

Someone with only $12,000 in retirement savings today can still make significant progress over time through disciplined contributions and long-term investing, he said. Boneparth also emphasized that retirement needs vary considerably depending on personal circumstances. “You may need more or significantly less,” he said. “It depends.”

Another challenge highlighted in the Schroders survey is that many retirement savers may not fully understand how their money is invested. Nearly 24% of respondents admitted they do not know how their retirement savings are allocated. Among those who do, the survey found that approximately 27% of their retirement assets are invested in equities, while 26% remain in cash.

Holding excessive amounts of cash may provide a sense of security, but it can also limit long-term investment growth, particularly for younger workers with decades before retirement.

Boyden said maintaining too much cash can create a “meaningful opportunity cost” for investors with long time horizons. Respondents cited several reasons for keeping large cash balances, including a desire for safety (53%), diversification (44%), and waiting for a better time to invest (33%).

Financial planners generally recommend reviewing retirement plans regularly and taking advantage of workplace education resources or professional financial advice. Boneparth said many workers who feel overwhelmed simply have not had an opportunity to develop a realistic long-term retirement strategy. “Most people who feel stuck haven’t sat down with someone to map it out,” he said. “That conversation alone tends to shift things.”