Is $1 Million Really the Magic Number You Need to Secure a Comfortable Retirement?
Conventional wisdom in the realm of retirement planning typically advises that individuals should strive to accumulate savings equivalent to 10 times their annual salary, or attain a so-called "magic number" that exceeds $1 million in savings, in order to enjoy a comfortable retirement.
However, studies focusing on the financial situations of actual retirees indicate that these prescribed savings targets may be excessively high, and potentially unattainable, for the majority of people.
According to the findings of a 2025 retirement survey conducted by the Transamerica Center for Retirement Studies, the average retiree possesses a mere $126,000 in savings at the household level. Additionally, data from other surveys indicates that approximately half of all retirees have managed to accumulate some amount of retirement savings. Furthermore, it is worth noting that a significant proportion of retirees report that they are faring relatively well in their post-working lives, with most retirees expressing satisfaction with their current financial situation, stating that they are doing pretty well.
According to the results of an April Gallup poll, a significant majority of 82% of retirees reported that they have sufficient financial resources to live comfortably.
The findings of the 2025 federal Survey of Household Economics and Decisionmaking revealed that 83% of Americans aged over 60 stated that they were either experiencing a comfortable standard of living, described as “living comfortably”, or managing their finances adequately, described as “doing okay” financially.
According to the findings of the Transamerica survey, a significant majority of 76% of retirees expressed confidence in their ability to maintain a comfortable lifestyle once they have retired.
The question of whether individuals are adequately preparing for retirement was addressed by Andrew Biggs, a senior fellow at the American Enterprise Institute, which is a libertarian organization, and he stated, “If what you’re asking is, ‘Are we preparing sufficiently for retirement,’ all of these numbers say that we are,” thereby indicating a generally positive outlook on retirement preparation.
A few years ago, Biggs generated considerable attention with a column published in the Wall Street Journal, which was featured under the provocative headline, “You Don’t Need to Be a Millionaire to Retire.”
The central argument presented by Biggs was that it is entirely possible to retire with significantly less than $1 million, a notion that is supported by the fact that the majority of Americans do indeed retire with less than this amount. Furthermore, numerous surveys have consistently indicated that most Americans who have retired with limited financial resources appear to be managing reasonably well and adapting to their post-work lives without major difficulties.
The financial stability of American retirees is a subject that is constantly being discussed and analyzed.
Voices in the retirement industry, as well as those in the news media, tend to exaggerate the idea of a retirement "crisis," according to Biggs, and also overemphasize the necessity for every family to accumulate seven-figure savings in order to have a chance at experiencing a comfortable retirement.
Biggs' perspective on this matter is shared by others, indicating that he is not the only one who holds this particular viewpoint.
Anqi Chen, associate director of savings and household finance at the Center for Retirement Research at Boston College, expressed her agreement that having a million dollars is not a necessity for every individual, stating that this amount is excessively high for certain people, while for others, it may not be sufficient, and ultimately, this single figure does not universally apply to everyone.
The notion of requiring a $1 million retirement account has its own set of advantages and disadvantages, but regardless of its merits, the reality is that the majority of Americans typically retire with significantly less money in their retirement accounts.
The assessment of their overall performance is a more complex and nuanced question that requires careful consideration.
In the context of the 2026 EBRI/Greenwald Retirement Confidence Survey, approximately three-quarters of the retirees who participated in the survey rated their financial wellbeing as being good, very good, or excellent, which provides valuable insights into their financial situations.
Additionally, a significant majority, with 73% of the respondents, expressed confidence that they will have a sufficient amount of money to last throughout their retirement, which is a crucial aspect of their financial security and stability.
According to Craig Copeland, who serves as the director of wealth benefits research at the Employee Benefit Research Institute, the majority of retirees appear to be managing their financial situation adequately, as he stated, “Most retirees do seem to be getting by.” However, Copeland also pointed out that the notion of what constitutes "getting by" can be somewhat ambiguous and complex, as he further noted, “But how we define ‘getting by’ becomes tricky.” When it comes to the issue of savings, retirees tend to exhibit a lower level of confidence in their financial preparedness, indicating a sense of uncertainty regarding their ability to maintain a stable financial situation during their retirement years.
According to the findings of the Transamerica survey, a mere 56% of retirees reported that they are confident in having established a sufficiently large retirement nest egg. This discovery is reasonable and aligns with the broader trends, considering that approximately half of the oldest Americans in the country actually possess retirement accounts, highlighting a notable gap in retirement preparedness among this demographic.
According to Catherine Collinson, the CEO of the Transamerica Center, retirees are currently managing their finances in a satisfactory manner. However, she emphasizes that if they were to encounter a significant financial setback, such as having to cover the costs of major out-of-pocket long-term care, their savings would be rapidly depleted. The findings of the Transamerica report reveal that approximately 50% of retirees indicate that they would depend on their family and friends to provide long-term care, rather than opting to pay for the services of professional caregivers, highlighting a notable trend in their preferred approach to receiving care.
The Center for Retirement Research is responsible for maintaining the National Retirement Risk Index, which provides an estimate of the number of workers who are at risk of being unable to maintain their standard of living once they enter retirement.
The National Retirement Risk Index has fluctuated over recent years, with the risk percentage ranging between approximately 40% and 50%, indicating a significant proportion of workers who may face financial difficulties in their post-working years.
Currently, the risk index stands at 39%, which translates to roughly 2 in every 5 workers potentially facing financial challenges and struggling to maintain their standard of living during retirement, suggesting that a substantial percentage of the workforce may not fare well in their golden years.
When considered collectively, the retirement surveys indicate that the majority of retirees are managing to make ends meet, but the financial stability they have achieved can be rather precarious and vulnerable to disruption.
This phenomenon is similarly applicable to millions of younger Americans, who are also facing financial challenges. A recent survey conducted by Bankrate discovered that a mere 47% of Americans possess sufficient cash reserves to cover the expenses associated with a $1,000 emergency, highlighting the financial fragility that many individuals are experiencing.
According to Biggs, of AEI, retirees generally exhibit greater financial stability in comparison to their younger American counterparts, a trend that is clearly reflected in the responses they provide on various surveys.
The Survey of Household Economics and Decisionmaking presents a notable example, wherein the proportion of Americans who report that they are experiencing financial difficulties, thereby doing worse than being merely "okay" financially, tends to decrease as age increases, specifically dropping from approximately 32 percent among individuals within the 35-44 age range to 12 percent among those aged 75 and older.
According to Biggs, only a very small percentage of seniors report that they are truly struggling, and these percentages are even lower compared to those of working individuals.
If the majority of people do not require $1 million in savings to retire comfortably, then what amount will actually be necessary for us to have in order to maintain a comfortable lifestyle during retirement.
The response to this question is contingent upon a multitude of factors, as asserted by Biggs and numerous other experts, initially taking into consideration the amount of money an individual earned throughout their working life.
The median household income in America is approximately $84,000, based on information obtained from federal data, which serves as a reference point for assessing one's earnings.
Even in the event that an individual managed to save an amount equivalent to 10 times their annual household income, they still would not have accumulated a total of $1 million.
According to retirement experts, lower-income households will require less income to maintain their standard of living, as the notion that they need to accumulate significant wealth is not entirely accurate. The idea of needing seven-figure retirement savings, often referred to as retirement magic numbers, is more relevant to individuals who are high earners, as their standard of living is typically higher.
The majority of Americans depend heavily on Social Security as their primary source of retirement income, and the benefits provided by this system are progressive in nature. This means that the amount of income an individual earns has a direct impact on the amount of Social Security benefits they receive, with lower-income earners receiving a larger proportion of their income back in the form of Social Security checks. Furthermore, the percentage of income that is replaced by Social Security benefits has a significant impact on the amount of additional savings that an individual needs to accumulate in order to supplement these benefits and maintain their desired standard of living during retirement.
Social Security essentially serves as a replacement for 90% of an individual's income, but only up to a certain threshold of $1,286 per month. Beyond this point, the replacement rate decreases significantly, dropping to 32% for incomes that fall within the range of $1,286 and $7,749, and further decreasing to 15% for incomes that exceed $7,749.
In other words, according to Biggs, lower-income households generally do not need to allocate a substantial portion of their resources towards saving for retirement, and as a result, they typically do not save very much for retirement.
However, studies focusing on the financial situations of actual retirees indicate that these prescribed savings targets may be excessively high, and potentially unattainable, for the majority of people.
According to the findings of a 2025 retirement survey conducted by the Transamerica Center for Retirement Studies, the average retiree possesses a mere $126,000 in savings at the household level. Additionally, data from other surveys indicates that approximately half of all retirees have managed to accumulate some amount of retirement savings. Furthermore, it is worth noting that a significant proportion of retirees report that they are faring relatively well in their post-working lives, with most retirees expressing satisfaction with their current financial situation, stating that they are doing pretty well.
According to the results of an April Gallup poll, a significant majority of 82% of retirees reported that they have sufficient financial resources to live comfortably.
The findings of the 2025 federal Survey of Household Economics and Decisionmaking revealed that 83% of Americans aged over 60 stated that they were either experiencing a comfortable standard of living, described as “living comfortably”, or managing their finances adequately, described as “doing okay” financially.
According to the findings of the Transamerica survey, a significant majority of 76% of retirees expressed confidence in their ability to maintain a comfortable lifestyle once they have retired.
The question of whether individuals are adequately preparing for retirement was addressed by Andrew Biggs, a senior fellow at the American Enterprise Institute, which is a libertarian organization, and he stated, “If what you’re asking is, ‘Are we preparing sufficiently for retirement,’ all of these numbers say that we are,” thereby indicating a generally positive outlook on retirement preparation.
A few years ago, Biggs generated considerable attention with a column published in the Wall Street Journal, which was featured under the provocative headline, “You Don’t Need to Be a Millionaire to Retire.”
The central argument presented by Biggs was that it is entirely possible to retire with significantly less than $1 million, a notion that is supported by the fact that the majority of Americans do indeed retire with less than this amount. Furthermore, numerous surveys have consistently indicated that most Americans who have retired with limited financial resources appear to be managing reasonably well and adapting to their post-work lives without major difficulties.
The financial stability of American retirees is a subject that is constantly being discussed and analyzed.
Voices in the retirement industry, as well as those in the news media, tend to exaggerate the idea of a retirement "crisis," according to Biggs, and also overemphasize the necessity for every family to accumulate seven-figure savings in order to have a chance at experiencing a comfortable retirement.
Biggs' perspective on this matter is shared by others, indicating that he is not the only one who holds this particular viewpoint.
Anqi Chen, associate director of savings and household finance at the Center for Retirement Research at Boston College, expressed her agreement that having a million dollars is not a necessity for every individual, stating that this amount is excessively high for certain people, while for others, it may not be sufficient, and ultimately, this single figure does not universally apply to everyone.
The notion of requiring a $1 million retirement account has its own set of advantages and disadvantages, but regardless of its merits, the reality is that the majority of Americans typically retire with significantly less money in their retirement accounts.
The assessment of their overall performance is a more complex and nuanced question that requires careful consideration.
In the context of the 2026 EBRI/Greenwald Retirement Confidence Survey, approximately three-quarters of the retirees who participated in the survey rated their financial wellbeing as being good, very good, or excellent, which provides valuable insights into their financial situations.
Additionally, a significant majority, with 73% of the respondents, expressed confidence that they will have a sufficient amount of money to last throughout their retirement, which is a crucial aspect of their financial security and stability.
According to Craig Copeland, who serves as the director of wealth benefits research at the Employee Benefit Research Institute, the majority of retirees appear to be managing their financial situation adequately, as he stated, “Most retirees do seem to be getting by.” However, Copeland also pointed out that the notion of what constitutes "getting by" can be somewhat ambiguous and complex, as he further noted, “But how we define ‘getting by’ becomes tricky.” When it comes to the issue of savings, retirees tend to exhibit a lower level of confidence in their financial preparedness, indicating a sense of uncertainty regarding their ability to maintain a stable financial situation during their retirement years.
According to the findings of the Transamerica survey, a mere 56% of retirees reported that they are confident in having established a sufficiently large retirement nest egg. This discovery is reasonable and aligns with the broader trends, considering that approximately half of the oldest Americans in the country actually possess retirement accounts, highlighting a notable gap in retirement preparedness among this demographic.
According to Catherine Collinson, the CEO of the Transamerica Center, retirees are currently managing their finances in a satisfactory manner. However, she emphasizes that if they were to encounter a significant financial setback, such as having to cover the costs of major out-of-pocket long-term care, their savings would be rapidly depleted. The findings of the Transamerica report reveal that approximately 50% of retirees indicate that they would depend on their family and friends to provide long-term care, rather than opting to pay for the services of professional caregivers, highlighting a notable trend in their preferred approach to receiving care.
The Center for Retirement Research is responsible for maintaining the National Retirement Risk Index, which provides an estimate of the number of workers who are at risk of being unable to maintain their standard of living once they enter retirement.
The National Retirement Risk Index has fluctuated over recent years, with the risk percentage ranging between approximately 40% and 50%, indicating a significant proportion of workers who may face financial difficulties in their post-working years.
Currently, the risk index stands at 39%, which translates to roughly 2 in every 5 workers potentially facing financial challenges and struggling to maintain their standard of living during retirement, suggesting that a substantial percentage of the workforce may not fare well in their golden years.
When considered collectively, the retirement surveys indicate that the majority of retirees are managing to make ends meet, but the financial stability they have achieved can be rather precarious and vulnerable to disruption.
This phenomenon is similarly applicable to millions of younger Americans, who are also facing financial challenges. A recent survey conducted by Bankrate discovered that a mere 47% of Americans possess sufficient cash reserves to cover the expenses associated with a $1,000 emergency, highlighting the financial fragility that many individuals are experiencing.
According to Biggs, of AEI, retirees generally exhibit greater financial stability in comparison to their younger American counterparts, a trend that is clearly reflected in the responses they provide on various surveys.
The Survey of Household Economics and Decisionmaking presents a notable example, wherein the proportion of Americans who report that they are experiencing financial difficulties, thereby doing worse than being merely "okay" financially, tends to decrease as age increases, specifically dropping from approximately 32 percent among individuals within the 35-44 age range to 12 percent among those aged 75 and older.
According to Biggs, only a very small percentage of seniors report that they are truly struggling, and these percentages are even lower compared to those of working individuals.
If the majority of people do not require $1 million in savings to retire comfortably, then what amount will actually be necessary for us to have in order to maintain a comfortable lifestyle during retirement.
The response to this question is contingent upon a multitude of factors, as asserted by Biggs and numerous other experts, initially taking into consideration the amount of money an individual earned throughout their working life.
The median household income in America is approximately $84,000, based on information obtained from federal data, which serves as a reference point for assessing one's earnings.
Even in the event that an individual managed to save an amount equivalent to 10 times their annual household income, they still would not have accumulated a total of $1 million.
According to retirement experts, lower-income households will require less income to maintain their standard of living, as the notion that they need to accumulate significant wealth is not entirely accurate. The idea of needing seven-figure retirement savings, often referred to as retirement magic numbers, is more relevant to individuals who are high earners, as their standard of living is typically higher.
The majority of Americans depend heavily on Social Security as their primary source of retirement income, and the benefits provided by this system are progressive in nature. This means that the amount of income an individual earns has a direct impact on the amount of Social Security benefits they receive, with lower-income earners receiving a larger proportion of their income back in the form of Social Security checks. Furthermore, the percentage of income that is replaced by Social Security benefits has a significant impact on the amount of additional savings that an individual needs to accumulate in order to supplement these benefits and maintain their desired standard of living during retirement.
Social Security essentially serves as a replacement for 90% of an individual's income, but only up to a certain threshold of $1,286 per month. Beyond this point, the replacement rate decreases significantly, dropping to 32% for incomes that fall within the range of $1,286 and $7,749, and further decreasing to 15% for incomes that exceed $7,749.
In other words, according to Biggs, lower-income households generally do not need to allocate a substantial portion of their resources towards saving for retirement, and as a result, they typically do not save very much for retirement.
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