Retirement Cost: Americans Want $1 Million Before They Stop Working

More working Americans believe they need at least $1 million to retire.
A view of California Public Employees' Retirement System (CalPERS) headquarters in Sacramento, California, on February 14, 2017. A survey found two out of every five Americans believes they need $1 million to retire. Max Whittaker/REUTERS

Two out of every five working Americans say they need at least $1 million saved up before they can comfortably retire. A vast number of workers apparently have no idea exactly how much it will cost to securely retire—and just thinking about it makes them stress out.

While 37 percent of workers, overall, said they’d need at least $1 million or more to successfully retire, 50 percent of people who grossed on average $75,000 said they’d need at least $1 million in the bank, according to the Employee Benefit Research Institute’s annual Retirement Confidence Survey. Only 17 percent of workers grossing under $35,000 said they’d need about $1 million to retire.

When it came to actually building up their bank accounts, though, Americans weren't doing that well.  Only 20 percent of U.S. workers actually had $250,000 or more in savings, not including the value of their homes or pension plans. Forty-seven percent of would-be millionaire retirees had saved about $25,000 while 24 percent had less than $1,000 saved.

Workers weren’t spending much time developing their retirement plans, either. Only 41 percent said they had taken time to figure out a reasonable retirement plan while every three in 10 workers in the U.S. said they felt mentally or emotionally stressed just thinking about retirement savings.

The stress may have come in part because many American workers lacked confidence in their ability to plan for retirement. Sixty-four percent of workers were somewhat confident in their abilities to save enough money for retirement when the survey was issued last year. However, the 2017 survey, which was conducted in January, found only 60 percent of workers, or six out of every 10 working people, felt somewhat confident with their retirement plans. Only 18 percent of workers felt very confident in their retirement efforts.

The survey, which was released in the EBRI’s March 2017 edition Monday, polled 1,082 workers and 589 retirees ages 25 and up.

The survey’s findings appear to be in line with a separate survey conducted by Merrill Lynch that found about 81 percent of working Americans didn’t know how much money they would need to comfortably retire.