Many Americans dream of retiring with a million-dollar nest egg —Americans in general think you need about $1. 5 million to retire—but the reality is starkly different.
Using figures from the U. S. Federal Reserves Survey of Consumer Finances (updated to 2022 but released in 2025), only about 2. 5% of all Americans actually have $1 million or more saved in their retirement accounts. This is a shocking number for anyone who is used to seeing financial media portraying average Americans as having huge portfolio gains in recent years.
The Million-Dollar Retirement Reality Check
Have you ever wondered how many people actually retire with a cool million in the bank? We’ve all heard that magical figure tossed around as the gold standard for a comfortable retirement, but the truth might surprise you.
According to Federal Reserve data, only about 3.2% of American retirees have managed to save $1 million or more in their retirement accounts. That’s right – just a tiny fraction of retirees actually hit this widely-aspired milestone. The percentage drops even further when looking at those with $5 million or more, which accounts for a mere 0.1% of retirees.
This reality check might be shocking, especially if you’ve been conditioned to believe that million-dollar retirements are common. They’re not – they’re actually quite rare.
Average Retirement Savings vs. The Million-Dollar Dream
When we look at what most Americans actually have saved for retirement the picture becomes clearer
- For individuals in their 60s, the average 401(k) retirement account balance is $573,624
- The median 401(k) balance for the same age group is much lower at $210,724
This significant gap between average and median values reveals an important truth high-income households significantly skew the average upward Most retirees have far less than the average suggests.
For older age groups, the savings picture looks like this:
| Age Group | Average 401(k) Balance | Median 401(k) Balance |
|---|---|---|
| 20s | $91,133 | $34,225 |
| 30s | $181,500 | $73,763 |
| 40s | $370,879 | $154,212 |
| 50s | $592,285 | $252,850 |
| 60s | $573,624 | $210,724 |
| 70s | $431,962 | $106,654 |
| 80s | $393,826 | $86,301 |
These numbers paint a clear picture – most Americans aren’t anywhere close to the million-dollar mark by retirement time.
What Counts as a “Million Dollars” in Retirement?
It is important to know what is being counted when talking about retirement wealth. Typically, “retirement wealth” or “net worth” includes:
- Bank accounts (checking and savings)
- Investment accounts
- Retirement plans (401(k)s and IRAs)
- Real estate equity (including primary residence)
- Other tangible assets (vehicles, personal property, business ownership)
Minus any liabilities like:
- Mortgages
- Credit card debt
- Student loans
- Auto loans
Normal sources of income, like Social Security or pensions, aren’t usually counted as part of net worth, even though they’re very important for retirement income.
Why Do So Few Retirees Reach the Million-Dollar Mark?
There are several key factors that make million-dollar retirements so uncommon:
1. Income Disparities
High-income households typically save significantly more for retirement. Research shows that high-income households have average retirement savings of $769,000, compared to just $79,500 for middle-income households. That’s nearly 10 times more!
2. Education Gap
College graduates tend to have more than three times the retirement savings of those with a high school diploma. The average college graduate has a net worth of around $1.52 million, while those with a high school diploma have about $305,000.
3. Homeownership Advantage
As a result, homeowners have much larger retirement savings—an average of $303,000, which is 267% more than the average renter. Again, this shows how owning property can be a great way to get rich.
4. Age Factors
Retirement savings tend to increase with age until people start drawing them down. For those aged 65 to 74, the median retirement savings is $164,000, while those 75 and older have a median of $83,000.
5. Racial Wealth Gap
White households have higher retirement savings compared to other racial groups. About 63% of White households had a retirement account balance in 2019, compared to 41% of households of all other races.
How Much Is Really Enough for Retirement?
Even though a million dollars sounds good, the real amount you need for retirement depends on:
- Expected lifestyle: Your planned standard of living
- Geographic location: Cost of living varies dramatically across regions
- Longevity: How long you expect to live in retirement
- Healthcare needs: Potential medical expenses
- Inflation: The purchasing power of your savings over time
Financial experts generally suggest aiming to replace about 80% of your pre-retirement income to maintain your lifestyle into retirement. For someone earning $100,000 annually before retirement, that means targeting around $80,000 per year in retirement income.
Investment Strategies to Maximize Retirement Savings
If you’re hoping to join that elite 3.2% with million-dollar retirements, here are some proven strategies:
- Maximize employer-sponsored retirement plans like 401(k)s, and contribute enough to receive the full employer match (it’s free money!)
- Increase contributions whenever you get a raise
- Supplement with IRAs and HSAs for additional tax advantages
- Choose low-fee investments to maximize returns
- Review and adjust investment strategies regularly to balance risk and reward
Is a Million Dollars Really Enough?
Here’s something many people don’t consider: a million dollars today won’t be worth the same in 20-30 years. Inflation steadily erodes purchasing power, meaning that $1 million in 1990 would be equivalent to about $2.5 million today.
Furthermore, a million dollars stretches differently depending on where you live. In expensive coastal cities, it might provide a much shorter retirement than in areas with lower costs of living.
For example, if you need your retirement funds to last 15 years, $1 million would provide about $66,000 per year. If you need them to last 25 years, that drops to around $40,000 annually. And these figures don’t account for inflation!
How Most Retirees Actually Get By
If only 3.2% of retirees have million-dollar portfolios, how do the other 96.8% manage? Most rely on a combination of:
- Social Security benefits
- Pension income (for those lucky enough to have them)
- Part-time work during retirement
- Downsizing their homes
- Support from family members
- Careful budgeting and lifestyle adjustments
What This Means for Your Retirement Planning
The reality that so few retirees achieve million-dollar savings shouldn’t be discouraging. Instead, it should be a call to:
- Start saving early – Time is your greatest ally due to compound interest
- Save consistently – Make retirement contributions a non-negotiable part of your budget
- Maximize tax advantages – Use 401(k)s, IRAs, and other tax-advantaged accounts
- Diversify investments – Don’t put all your eggs in one basket
- Consider working longer – Each additional year of work can significantly boost retirement security
- Plan for healthcare costs – They often take a bigger bite than expected
- Be realistic about your needs – The “million-dollar” benchmark isn’t necessary for everyone
The fact that only 3.2% of retirees have a million dollars saved might seem alarming, but it doesn’t mean a comfortable retirement is out of reach. Retirement planning isn’t one-size-fits-all – it’s about figuring out your personal needs and working toward them systematically.
What really matters is building strong financial habits, saving consistently, investing wisely, and making the most of tax-advantaged retirement accounts. Even if you never reach that magical million-dollar mark, you can still create a retirement that provides security and comfort.
The key is to start now, be consistent, and focus on what you can control. We all have different retirement journeys, and success isn’t measured by whether you hit an arbitrary number – it’s about creating a sustainable plan that works for your unique situation.
Remember, even small steps taken today can make a huge difference in your financial future. And that’s worth more than any arbitrary million-dollar goal.
What Most Retirees Actually Have
The gap between expectation and reality becomes even clearer when examining specific groups. The average amount saved for retirement in households with a head of household aged 65 to 74 is $200,000. For those aged 75 and up, that number drops to $130,000.
Why So Few Reach $1 Million
Several factors explain why million-dollar retirement accounts are relatively rare. The most obvious factor is income. Households with a high income save an average of $769,500 a year, while middle-income households only save $79,500.
Education makes a dramatic difference, too. College graduates have more than three times the retirement savings of those with a high school diploma. The median value of retirement savings for a U. S. college graduate ($141. 7k) is more than three times that of those with only a high school diploma ($44k).
Homeownership also significantly impacts retirement savings, with homeowners averaging $303,000 in retirement accounts, more than 2. 5 times as much as renters.
How $1,000,000 Can Be Enough For Retirement
FAQ
How many Americans retire with $1 million dollars?
Key Takeaways. Only 3. 2% of retirees have $1 million in retirement accounts vs. about 2. 6% of Americans in general.
What is the average net worth of retirees?
The average net worth of retirees varies by age, with the 65-74 age group having an average net worth of around $1. 79 million, and the 75 and older group having an average net worth of about $1. 62 million, according to Federal Reserve data.
At what age should you have $1 million in retirement?
There’s no single age to have $1 million for retirement, as it depends on individual factors like your lifestyle, expenses, and expected lifespan, but financial experts often recommend having this amount by your late 50s or 60s, possibly as early as your 50s if you have a conservative lifestyle or later if you have higher costs.
How many people have $2 million in retirement savings?
Approximately 1. 8% of U. S. households have $2 million or more in retirement savings, according to the Employee Benefit Research Institute (EBRI)’s analysis of the Federal Reserve’s 2022 Survey of Consumer Finances.
How much money do retirees have in their retirement accounts?
According to estimates based on the Federal Reserve Survey of Consumer Finances, only 3. 2% of retirees have over $1 million in their retirement accounts. This percentage drops even further when considering those with $5 million or more, accounting for a mere 0. 1% of retirees.
What percentage of Americans have $1 million in retirement savings?
The vast majority of Americans do not have $1 million in retirement savings. Using data from the Federal Reserve’s most recent Survey of Consumer Finances (2022), EBRI calculated that only 4. 7% of Americans have $1 million in retirement accounts. That percentage drops to 1. 8% for the $2 million threshold and 0. 8% for $3 million.
Can you retire on 1 million?
Whether you can retire on $1 million depends on your lifestyle, location and other income sources. However, relatively few people reach this benchmark. According to an analysis of Federal Reserve data by the Employee Benefits Research Institute, less than 5% of Americans have saved $1 million for retirement.
How much money do you have saved for retirement?
However, relatively few people reach this benchmark. In fact, less than 5% of Americans have $1 million saved for retirement, according to an Employee Benefits Research Institute analysis of Federal Reserve data. This figure highlights how uncommon seven-figure nest eggs are, even as the cost of retirement continues to climb.
How much money should you invest in a retirement account?
As mentioned, $1 million in tax-advantaged retirement accounts will put you in the top 3% of retirement savers. As far as net worth is concerned, estimates that use the same data from the Federal Reserve survey have found that a net worth of $4. 64 million would put you in the top 3% of American households. 11.
How much money does the average American have for retirement?
The average American has less than $260,000 for retirement. But this number might not tell the story you think it does. Published by Motley Fool Wealth Management on October 25, 2023. Last updated on September 24, 2024. We won’t keep you guessing.