US Workers Say They Need $1.8M for RetirementUS Workers Say They Need $1.8M for Retirement
A new survey of people who have 401(k) plans found that it’s getting harder to put money away as costs rise.
August 3, 2023
(Bloomberg) -- Workers are finding it harder to save for retirement, even as the amount they need keeps rising.
The average savings target in the US is now $1.8 million, according to a nationwide Charles Schwab survey released Wednesday. That’s up from $1.7 million a year ago.
Nearly 80% of the 1,000 401(k) plan participants surveyed said inflation and market volatility were getting into the way of saving more this year, and 36% of those respondents said they’d retire later than planned as a result.
The year-over-year overall retirement target in the Schwab survey isn’t a huge change, at about 6%, but the percentage of workers who think it’s “very likely” they’ll reach that goal fell to 37% from 47% a year ago, and from 53% in 2021.
Read more: Retirement Savings Shortfall in US Will Cost $1.3 Trillion
Americans are facing a massive retirement shortfall, and potential cuts to Social Security benefits could make matters worse. A recent report from Vanguard found that the average balance for Vanguard defined contribution plan participants was $112,572 at the end of last year, and the median was $27,376. At Fidelity Investments, the average 401(k) balance was $108,200 in the first quarter of 2023.
To contact the author of this story:
Suzanne Woolley in New York at [email protected]
