Do You Really Need $1 Million Saved to Retire in 2025?

More than 95% of American retirees don't have $1 million saved in retirement accounts. So when you hear the headline "you need a million to retire," you're right to raise an eyebrow.

I've seen how the "$1 million rule" can both motivate and mislead. Here's what really goes into retirement readiness, and whether that seven-figure benchmark makes sense for you in 2025.

Why the "$1 million to retire" myth persists

That round number sticks around because it's simple, sexy, and easy to market. Surveys show Americans believe they'll need roughly $1.28 million to retire comfortably. And yet, the actual data says fewer than 5% of households with retirement accounts reach even $1 million.

Here's where things get interesting:

• Lifestyle and location matter a lot more than the headline number.
• You might not need $1 million if you live modestly, delay retirement, or count on other income sources.
• You might need far more if you live in a high-cost region, retire early, or expect a long retirement.

The number alone is far less useful than an individualized plan built around your spending, savings rate, and risk profile.

What the data really tells us about savings

Here's a quick snapshot:

• The Federal Reserve's 2022 Survey of Consumer Finances shows that only 4.7% of Americans with retirement accounts had hit the $1 million mark.
• Yet many Americans still expect to need nearly $1.3 million or more to retire.

That gap between expectation and reality is huge, and it's why I tell readers to not let the number scare you, but do let the math motivate you.

How to catch up if you're behind

If your retirement savings aren't where you hoped they'd be, you're not alone nor out of time. Even small, steady changes can make a big difference in your 50s and 60s. Here's how to get back on track.

1. Max out your catch-up contributions

If you're 50 or older, the IRS gives you extra room to save. In 2025, you can contribute $7,500 more to your 401(k) and $1,000 more to your IRA on top of the standard limits. These extra contributions can significantly boost your tax-deferred growth in the years before retirement.

If you're ready to open a new retirement account or move your existing one to a lower-cost platform, see our best online brokers for IRAs to compare options and start investing smarter today.

2. Capture your full employer match

If your company offers a 401(k) match, don't leave that money on the table. It's effectively a 50% or 100% guaranteed return. For example, if you earn $70,000 and contribute 6% to your plan, a 50% employer match adds another $2,100 a year completely free.

3. Automate your savings

Momentum matters. Automating contributions -- whether to your 401(k), IRA, or even a high-yield savings account earning 4.00% APY -- removes willpower from the equation. Money you never see in your checking account is money you'll never miss.

4. Consider professional guidance

If the idea of "catching up" feels daunting, that's normal. A fiduciary financial advisor can help you build a plan that fits your timeline and goals. Luckily, this no-cost quiz from our partner, SmartAsset, makes it easier to find a fiduciary financial advisor. Get on top of your retirement savings today.

The smarter takeaway

So, do you really need $1 million to retire in 2025? The short answer: maybe not. What you do need is clarity about how much you'll spend, how much you'll earn, and how long you'll need the money to last. Redirect your energy from chasing a headline number to building a sustainable strategy.

When you align your savings with your lifestyle, and not just a target, you're far likelier to retire with confidence.