Here's How Many People Actually Save $1 Million for Retirement
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That big round number always gets thrown around for retirement: $1 million. Supposedly, that's what it takes to retire comfortably and never worry about money again.
But for most people, that number is more fantasy than fact.
The Federal Reserve's latest data shows only about 2.5% of Americans have $1 million or more saved for retirement. Among retirees, it's just 3.2%. So if your account balance looks far smaller, you're not behind: You're normal.
The problem with chasing a round number
According to Northwestern Mutual's 2024 Planning & Progress Study, the average American now believes they'll need $1.5 million to retire comfortably. That estimate makes sense given rising prices and longer lifespans, but it's far from reality.
Barely half of U.S. households even have a retirement account. Among those that do, the typical balance is around $87,000. That's not enough to last decades, but it's a start. And it's a reminder that building steady savings matters more than hitting a headline goal.
Why so many people struggle to save
Saving for retirement isn't as simple as "spend less." Some workers never get access to 401(k) plans. Others delay investing while juggling student loans, rent, family expenses, or whatever else life throws their way.
Even when people save regularly, inflation and market volatility can chip away at progress. And the math of compounding rewards time above all else. Someone who invests $500 a month starting at 25 could retire with about $1 million by 65, assuming a 7% annual return. Start at 40, and you'd have to save nearly three times as much each month to catch up.
Steps to rebuild, accelerate, or start your savings
Falling behind doesn't mean you're out of options. There are several smart ways to boost your retirement progress starting now.
1. Use catch-up contribution limits
If you're 50 or older, the IRS allows higher annual contributions. In 2025, that's an extra $7,500 for 401(k)s and $1,000 for IRAs. See today's best brokers for IRAs and compare options.
2. Claim your full employer match
If your company matches contributions, make sure you're getting every dollar. A 50% match on 6% of a $70,000 salary adds up to $2,100 a year of free money.
3. Set up automatic transfers
Automating your savings removes the guesswork. Even shifting a small portion of your paycheck into a high-yield savings account paying around 4.00% APY can add up over time. Compare top high-yield savings accounts here.
4. Consider professional guidance
A certified financial advisor can help you create a realistic, tax-efficient plan. 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 real goal: reliable income, not a magic number
Retirement isn't about crossing the million-dollar line. It's about covering your needs without stress.
Between Social Security, part-time work, investments, and other income sources, many retirees live comfortably on far less than $1 million. What matters most is consistency. Save what you can, invest regularly, and give your money time to grow.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.