Retirement Reality: Half of Americans Say $1 Million Not Enough

A GOBankingRates survey finds 49% of American adults believe $1 million in savings is not enough to retire comfortably, with 10% thinking it takes at least $2 million. The survey also reveals a gender gap in retirement confidence, with women more likely to doubt their ability to retire comfortably.

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Bijay Laxmi
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Retirement Reality: Half of Americans Say $1 Million Not Enough

Retirement Reality: Half of Americans Say $1 Million Not Enough

A retirement, costs, study reveals a sobering reality about retirement in America: nearly half of adults believe that even $1 million in savings is not enough to retire comfortably. The study, conducted by GOBankingRates, found that 49% of respondents think they would need more than $1 million to feel financially secure in their golden years, with 10% believing it takes at least $2 million.

Why this matters: This survey highlights a growing concern about retirement security in the United States, which could have significant implications for the economy and social security systems. As the population ages, the inability of individuals to afford retirement could lead to increased burdens on the healthcare and social services systems.

The survey of over 1,000 American adults also highlighted a sense of pessimism about the ability to afford retirement at all. A significant portion, 19%, said they do not believe they will ever be able to retire comfortably. On the other end of the spectrum, 25% of respondents think they could manage with savings less than $500,000.

Financial experts emphasize that the amount needed for a comfortable retirement depends on individual circumstances. "The answer to whether $1 million is enough to retire comfortably will depend on things like your travel plans and any big-ticket items you expect to purchase," said David Bakke, a financial expert at DollarSanity. Brandon Galici, a CFP and owner of Galici Financial, advises calculating one's "Total Term" ratio, or total net worth divided by annual spending, aiming for a ratio around 30 for retirement in one's 60s.

The survey also revealed a gender gap in retirement confidence. Women are more likely to doubt their ability to retire comfortably, with 23% responding that they do not believe they will ever be able to afford it, compared to 14% of men. Men also tend to be more optimistic that savings between $500,000 and $1 million will be financial, obligations.

Retirees often face unexpected unexpected expenses that can strain even seemingly ample savings. Healthcare expenses tend to rise with age, and budgeting on the high side for these costs is crucial. Supporting elderly parents is another potential expense, as is the possibility of needing long-term care. Up to 70% of adults 65 and older will require long-term care, with median costs ranging from $2,058 for adult day health care to $9,733 for a private room in a nursing home.

The GOBankingRates survey, conducted in January 2024, underscores the importance of diligent retirement planning and building a robust financial safety net. With many Americans doubting the sufficiency of even $1 million in savings, experts advise careful budgeting for both expected and unexpected costs to ensure a comfortable retirement.

Key Takeaways

  • 49% of Americans think $1 million isn't enough for a comfortable retirement.
  • 10% believe it takes at least $2 million to feel financially secure in retirement.
  • 19% of respondents don't think they'll ever be able to retire comfortably.
  • Women are more likely to doubt their ability to retire comfortably than men.
  • Experts advise careful budgeting for expected and unexpected costs in retirement.