The Schroders 2022 U.S. Retirement Survey reveals that Americans say it will take $1.1 million on average to retire comfortably.
Yet only one-quarter of those surveyed expect to reach that savings mark. Significantly, among respondents nearing retirement — ages 60 to 67 — more than half say they will have less than $250,000 saved at retirement.
Survey numbers similar to these results are routine these days. These surveys feed the widespread sense that the retirement years has become synonymous with financial disappointment.
The current rise in inflation to a 40-year high only adds to the belief that retirees are doomed to fall short of the money they'll need to maintain their standard of living in retirement.
Problem is, the drumbeat of retirement catastrophe stories are misplaced.
Figures like $1.1 million are unattainable for many savers. But the number only represents the size of an accumulated pot without providing any information about annual income and expenses. Context is lacking and when it comes to personal finance, context is everything.
More important, there is a serious retirement crisis and it's concentrated among older adults who earned low and unstable wages during their careers. They typically worked for employers who didn't offer a retirement savings plan or health insurance at work. They've lived on the financial margins during their work lives, and they'll continue to do so in retirement.
That said, most retirees should find themselves in decent financial circumstances with room to maneuver later in life, says Meir Statman, professor of finance at the Leavey School of Business at Santa Clara University in a recent conversation.
