Saving $1 million or more for retirement is a goal that many aspire to achieve. However, according to Smart Asset, only around 10% of retirees reach this milestone. The majority of retirees have far less saved.
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The average and median net worth figures for individuals aged 55 and up show a significant increase compared to younger age groups, which could be because Gen X is currently earning the highest salary. According to a Kiplinger analysis of Federal Reserve data, for those aged 55-59, the average net worth is $1,442,075, while the median net worth is $320,700.
As people enter their 60s, these numbers continue to rise. In the 60-64 age group, the average net worth jumps to $1,675,214, with a median of $394,010. In the 65-69 age range, the average net worth reaches $1,836,884, with a median of $394,300.
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Net worth dips slightly between 70 and 74. The average is $1,714,085, and the median is $433,100. This shows that retirees in this age bracket tend to have more money on average.
Saving $1 million for retirement may seem tough, but it’s achievable with proper planning and a little discipline. For example, setting aside $20 a day can accumulate to $1 million over time, especially if invested wisely. The key is to start early and take advantage of compound interest.
Where you retire can also significantly impact how far your savings will go. A $1 million nest egg can cover an average of 18.9 years of living expenses in the U.S., but this varies by state. For instance, in Mississippi, $1 million can last nearly 23 years due to lower living costs, while in Hawaii, it might only last about 10 years due to higher expenses.
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Despite the aspiration to save $1 million, many retirees manage with much less. According to Andrew Biggs, a senior fellow at the American Enterprise Institute, retirees can live comfortably with savings between $50,000 and $100,000, supplemented by Social Security benefits. He argues that the notion of needing $1 million is often overstated by financial planners.
To maximize retirement savings, individuals should consider enrolling in a 401(k) plan, contributing enough to get the full employer match, and increasing contributions with annual raises. Opening a traditional or Roth IRA and a Health Savings Account (HSA) if eligible, can further boost savings. Choosing low-fee investments and regularly reviewing fees can also help maximize returns.
So, while saving $1 million or more for retirement might be a common goal, it’s certainly not the only path to a secure retirement. Strategic planning, disciplined saving, and smart investment choices can help you live the life you want in your retirement years, regardless of the amount saved.
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This article Can You Guess What Percent Of Retirees Have $1 Million Saved? Here’s A Look At The Net Worth Of People 55 And Up originally appeared on Benzinga.com
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