New York, NY – April 4, 2023
For the second year in a row, working Americans ages 45 and older say on average, it will take about $1,100,000 in savings to retire comfortably, according to the Schroders 2023 U.S. Retirement Survey. Unfortunately, only 21% expect to reach the $1,000,000 mark, down from 24% in 2022. More than half (59%), say they expect to have less than $500,000 saved, including 34% forecasting less than $250,000 in savings.
Millennial workers (ages 27-42) expect on average, it will take about $1,300,000 to retire comfortably, but only 29% say they expect to reach $1,000,000 in retirement savings. Almost half (49%) say they expect to have less than $500,000 saved, including 27% with less than $250,000 in savings by retirement.
On the Doorstep of Retirement, Readiness Persistently Low
The percentage of non-retired Americans nearing retirement age (60-67 years old) who said they have enough money to retire was just 24%, a slight uptick from 22% in 2022.
“There are profound gaps between what American workers say they need for a comfortable retirement and what they expect to have,” said Deb Boyden, Head of US Defined Contribution, Schroders. “This could be from a lack of planning, or for many, it might just be too hard to save and invest enough to reach their retirement goals. The fact that, once again, so few Americans nearing retirement are confident they have enough money speaks volumes about the work we still need to do. All of us, from employers to advisors to our industry, must do more to make it easier for American workers to reach retirement security.”
Anxiety, Lost Sleep, Health Concerns: The Real Impact of Financial Stress
Almost two-thirds (64%) of working millennials and 53% of older workers are concerned that financial stress will negatively affect their overall health.
The majority of older workers (56%) and working millennials (55%) said the 2022 stock market greatly increased their anxiety. Almost half (49%) of millennial workers have lost sleep worrying about their financial situation, as have 40% of workers 45 and older.
Millennials Spend the Most Time Worrying About Money
Among working Americans, 85% of millennials said they worry each day about money, and those that do spend on average 1.9 hours per day or about 13 hours a week worrying. This calculates to approximately 28 full days a year worrying about money.
Of workers ages 45 and up, 69% said they worry each day about money, and those that do spend on average 1.6 hours or about 11 hours each week. This amounts to approximately 24 days a year worrying about money.
Retirement Plans Contribute to Anxiety. High Cash Balances a Result?
Almost half (48%) of working millennials and 50% of older workers with a workplace retirement plan like a 401k said the performance of their plan in 2022 caused them anxiety.
Further, almost two-thirds (64%) of working millennials and 62% of older workers with workplace retirement plans worry they won’t be able to grow their workplace retirement plan assets to the level they hoped to achieve.
A look at how they allocate their retirement investments – including workplace plans, IRAs, or other retirement accounts – reveals a significant allocation to cash. Why? Fear of losing money.
Source: The Schroders 2023 U.S. Retirement Survey