Is $1 Million Really the Retirement Magic Number You Need to Secure Your Financial Future?
Conventional wisdom in the realm of retirement planning suggests that individuals should strive to save approximately 10 times their annual salary, or accumulate a substantial amount of savings, typically exceeding $1 million, in order to retire comfortably.
However, research focusing on actual retirees indicates that these savings targets may be excessively high, at least for the majority of the population.
According to a 2025 retirement survey conducted by the Transamerica Center for Retirement Studies, the average retiree has only $126,000 in household savings. Other surveys have found that only about half of retirees have managed to accumulate any retirement savings.
Interestingly, despite these relatively modest savings, most retirees report that they are doing reasonably well financially.
In a Gallup poll conducted in April, a significant 82% of retirees stated that they have sufficient funds to live comfortably.
Similarly, in the 2025 federal Survey of Household Economics and Decisionmaking, 83% of Americans over the age of 60 reported that they were either "living comfortably" or "doing okay" financially.
Additionally, in the Transamerica survey, 76% of retirees expressed confidence that they would be able to maintain a comfortable lifestyle in retirement.
Andrew Biggs, a senior fellow at the American Enterprise Institute, noted that these numbers suggest that people are generally preparing sufficiently for retirement.
A few years ago, Biggs authored a provocative column in the Wall Street Journal, titled "You Don't Need to Be a Millionaire to Retire," in which he argued that retiring with significantly less than $1 million is entirely feasible.
Biggs' point is that most Americans do indeed retire with less than $1 million, and as various surveys have consistently shown, the majority of them appear to be managing reasonably well.
The financial stability of American retirees is a topic of ongoing debate, with some voices in the retirement industry and the news media exaggerating the notion of a retirement "crisis" and overstating the need for families to accumulate seven-figure savings in order to achieve a comfortable retirement.
Biggs is not alone in his view, as Anqi Chen, associate director of savings and household finance at the Center for Retirement Research at Boston College, also agrees that not everyone requires a million dollars to retire comfortably.
"It's a very high number for some people, and not enough for others," Chen said, emphasizing that a single magic number cannot possibly fit everyone's circumstances.
While the idea of a $1 million retirement account may be appealing, most Americans retire with significantly less savings.
The question of how well they are doing financially is more complex and nuanced.
In the 2026 EBRI/Greenwald Retirement Confidence Survey, approximately three-quarters of retirees rated their financial wellbeing as good, very good, or excellent, and 73% expressed confidence that they would have sufficient funds in retirement.
Most retirees do seem to be getting by, according to Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute, but the definition of "getting by" can be somewhat tricky.
When it comes to savings, retirees are less confident, with only 56% of respondents in the Transamerica survey stating that they believe they have built a sufficient retirement nest egg.
This finding is not surprising, given that only about half of the oldest Americans have retirement accounts.
While retirees may be doing okay financially, they are vulnerable to major financial shocks, such as having to pay for long-term care, which could rapidly deplete their savings, according to Catherine Collinson, CEO of the Transamerica Center.
In the Transamerica report, nearly 50% of retirees stated that they would rely on family and friends to provide long-term care, rather than paying for professional caregivers.
The Center for Retirement Research maintains a National Retirement Risk Index, which estimates the percentage of workers who are at risk of not maintaining their standard of living in retirement.
In recent years, the risk index has fluctuated between approximately 40% and 50%, and currently stands at 39%, indicating that roughly 2 in 5 workers may struggle financially in retirement.
Taken together, the retirement surveys suggest that most retirees are managing to make ends meet, but their financial stability is fragile and vulnerable to disruptions.
This is also true for millions of younger Americans, as a recent Bankrate survey found that only 47% of Americans have sufficient cash on hand to cover a $1,000 emergency.
Biggs noted that retirees are generally more financially stable than younger Americans, as evidenced by their responses to surveys.
In the Survey of Household Economics and Decisionmaking, for example, the percentage of Americans who report doing worse than "okay" financially declines with age, from approximately 32% at ages 35-44 to 12% at ages 75 and up.
Only a tiny percentage of seniors report struggling financially, and these percentages are smaller than those for working people, Biggs observed.
If most people do not need $1 million in the bank to retire comfortably, how much will they need?
The answer depends on various factors, including how much an individual earned during their working life, according to Biggs and other experts.
The median household income in the United States is around $84,000, according to federal data, which means that even if an individual saved 10 times that amount, they would not have $1 million.
Lower-income households will require less income to sustain their standard of living in retirement, experts say, and the idea of a seven-figure retirement magic number is more relevant to high earners.
Most Americans rely primarily on Social Security for retirement income, and these benefits are progressive, meaning that lower-income individuals receive a higher percentage of their income in Social Security checks.
This, in turn, affects how much they need to save to supplement their benefits, as Social Security replaces 90% of income up to $1,286 per month, 32% for incomes between $1,286 and $7,749, and 15% for incomes above $7,749.
In other words, lower-income households should not need to save as much for retirement, and indeed, they are not saving very much, Biggs noted.
According to Biggs, the key to determining how much one needs to save for retirement is to consider their individual circumstances, including their income level and expected expenses in retirement.
However, research focusing on actual retirees indicates that these savings targets may be excessively high, at least for the majority of the population.
According to a 2025 retirement survey conducted by the Transamerica Center for Retirement Studies, the average retiree has only $126,000 in household savings. Other surveys have found that only about half of retirees have managed to accumulate any retirement savings.
Interestingly, despite these relatively modest savings, most retirees report that they are doing reasonably well financially.
In a Gallup poll conducted in April, a significant 82% of retirees stated that they have sufficient funds to live comfortably.
Similarly, in the 2025 federal Survey of Household Economics and Decisionmaking, 83% of Americans over the age of 60 reported that they were either "living comfortably" or "doing okay" financially.
Additionally, in the Transamerica survey, 76% of retirees expressed confidence that they would be able to maintain a comfortable lifestyle in retirement.
Andrew Biggs, a senior fellow at the American Enterprise Institute, noted that these numbers suggest that people are generally preparing sufficiently for retirement.
A few years ago, Biggs authored a provocative column in the Wall Street Journal, titled "You Don't Need to Be a Millionaire to Retire," in which he argued that retiring with significantly less than $1 million is entirely feasible.
Biggs' point is that most Americans do indeed retire with less than $1 million, and as various surveys have consistently shown, the majority of them appear to be managing reasonably well.
The financial stability of American retirees is a topic of ongoing debate, with some voices in the retirement industry and the news media exaggerating the notion of a retirement "crisis" and overstating the need for families to accumulate seven-figure savings in order to achieve a comfortable retirement.
Biggs is not alone in his view, as Anqi Chen, associate director of savings and household finance at the Center for Retirement Research at Boston College, also agrees that not everyone requires a million dollars to retire comfortably.
"It's a very high number for some people, and not enough for others," Chen said, emphasizing that a single magic number cannot possibly fit everyone's circumstances.
While the idea of a $1 million retirement account may be appealing, most Americans retire with significantly less savings.
The question of how well they are doing financially is more complex and nuanced.
In the 2026 EBRI/Greenwald Retirement Confidence Survey, approximately three-quarters of retirees rated their financial wellbeing as good, very good, or excellent, and 73% expressed confidence that they would have sufficient funds in retirement.
Most retirees do seem to be getting by, according to Craig Copeland, director of wealth benefits research at the Employee Benefit Research Institute, but the definition of "getting by" can be somewhat tricky.
When it comes to savings, retirees are less confident, with only 56% of respondents in the Transamerica survey stating that they believe they have built a sufficient retirement nest egg.
This finding is not surprising, given that only about half of the oldest Americans have retirement accounts.
While retirees may be doing okay financially, they are vulnerable to major financial shocks, such as having to pay for long-term care, which could rapidly deplete their savings, according to Catherine Collinson, CEO of the Transamerica Center.
In the Transamerica report, nearly 50% of retirees stated that they would rely on family and friends to provide long-term care, rather than paying for professional caregivers.
The Center for Retirement Research maintains a National Retirement Risk Index, which estimates the percentage of workers who are at risk of not maintaining their standard of living in retirement.
In recent years, the risk index has fluctuated between approximately 40% and 50%, and currently stands at 39%, indicating that roughly 2 in 5 workers may struggle financially in retirement.
Taken together, the retirement surveys suggest that most retirees are managing to make ends meet, but their financial stability is fragile and vulnerable to disruptions.
This is also true for millions of younger Americans, as a recent Bankrate survey found that only 47% of Americans have sufficient cash on hand to cover a $1,000 emergency.
Biggs noted that retirees are generally more financially stable than younger Americans, as evidenced by their responses to surveys.
In the Survey of Household Economics and Decisionmaking, for example, the percentage of Americans who report doing worse than "okay" financially declines with age, from approximately 32% at ages 35-44 to 12% at ages 75 and up.
Only a tiny percentage of seniors report struggling financially, and these percentages are smaller than those for working people, Biggs observed.
If most people do not need $1 million in the bank to retire comfortably, how much will they need?
The answer depends on various factors, including how much an individual earned during their working life, according to Biggs and other experts.
The median household income in the United States is around $84,000, according to federal data, which means that even if an individual saved 10 times that amount, they would not have $1 million.
Lower-income households will require less income to sustain their standard of living in retirement, experts say, and the idea of a seven-figure retirement magic number is more relevant to high earners.
Most Americans rely primarily on Social Security for retirement income, and these benefits are progressive, meaning that lower-income individuals receive a higher percentage of their income in Social Security checks.
This, in turn, affects how much they need to save to supplement their benefits, as Social Security replaces 90% of income up to $1,286 per month, 32% for incomes between $1,286 and $7,749, and 15% for incomes above $7,749.
In other words, lower-income households should not need to save as much for retirement, and indeed, they are not saving very much, Biggs noted.
According to Biggs, the key to determining how much one needs to save for retirement is to consider their individual circumstances, including their income level and expected expenses in retirement.
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