The $1.2 Million Retirement Number Comes From Its Biggest Seller

Workers now say they need $1.2 million saved to retire comfortably. Half expect to retire with less than $500,000 instead, according to a new survey from Schroders, the global asset manager. Only 30% think they will ever cross the $1 million mark, and the survey behind those numbers came out July 15.

Schroders wants those same savers to move out of cash and into stocks, bonds and its own private market funds. It sells all three, and its survey doubles as a pitch.

A $1.2 Million Target, a $500,000 Reality

The number comes from Schroders’ 2026 US Retirement Survey, conducted by the research firm 8 Acre Perspective between March 20 and April 15. Schroders polled 1,500 US investors nationwide, including 615 people currently saving in a workplace retirement plan such as a 401(k), 403(b) or 457.

Fifty one percent of those workplace savers expect to have less than $500,000 saved by retirement, including 24% who think they will land under $250,000. Just 30% believe they will reach $1 million.

That gap has left 81% of plan participants at least slightly worried about running out of money after they stop working.

Deb Boyden, Schroders’ head of U.S. defined contribution, described the split plainly. “Participants have that million dollar goal, but many are on a half million dollar savings trajectory,” she said.

Debt Is Already Draining the Nest Egg

Schroders’ own data shows why saving is so hard. Sixty nine percent of plan participants said rising costs for health care, housing, insurance and utilities have put retirement out of reach for their generation.

Fifty five percent said they cannot set aside 10% of their paycheck because of competing expenses, and a third said their credit card debt is bigger than their retirement account.

“Rising costs are forcing tough tradeoffs, and saving for retirement is often the first thing that gets deprioritized,” Boyden said in the July 15 release.

More than a quarter of participants, 27%, have already borrowed money from their workplace plan to cover emergencies, pay down debt or keep up with the cost of living. A similar share cut their contributions, 70% of them in just the past two years.

Two of the country’s biggest retirement plan providers, working from their own recordkeeping data rather than a survey, describe the same pattern.

Vanguard’s How America Saves report found the typical hardship withdrawal ran $1,900, mostly to avoid foreclosure or eviction or to cover medical bills. Fidelity’s Q1 2026 analysis, meanwhile, showed the average 401(k) balance dip 4% to $141,000 amid market volatility tied to the Iran war. Three separate companies, three separate datasets, all pointing at savers pulling money out of accounts that are supposed to sit untouched for decades.

Who Profits When Savers Fear the Market?

Schroders is the same firm sponsoring the survey that found savers hoarding cash out of fear. It is also a $1.1 trillion global asset manager that sells the active stock and bond funds, target date funds and private market products it says frightened savers should own more of instead of cash.

Schroders reported $1,107.9 billion in assets under management as of December 31, 2025, spread across public markets, wealth management and its private markets arm, Schroders Capital, which handles private equity, private credit, infrastructure and real estate.

For investors who are not planning to retire in the next five years, holding one quarter of your savings in cash comes with a significant opportunity cost. Concerns about market volatility and downturns are understandable given the current macro backdrop. To alleviate these concerns, innovative new investment solutions have been developed that can lessen the impact of market drawdowns and thereby provide participants some peace of mind.

Boyden said that in the same July 15 release, pivoting from a warning about cash straight into a pitch for Schroders’ own drawdown protection products.

The company has also spent the past two years pushing plan sponsors and regulators to open 401(k) menus to private markets. A separate Schroders study found 45% of plan participants would add private equity or private debt to their 401(k) if given the option, up from 36% in 2024. Twelve percent of savers in the July survey already hold some private equity or credit inside their retirement accounts.

That push follows a White House executive order directing the Labor Department to study wider access to alternative assets in workplace retirement plans, a shift that would widen the market for exactly the products Schroders Capital sells.

Where Retirement Money Actually Sits

Schroders also asked plan participants how their savings are actually invested. The answers describe a portfolio far more conservative than most advisors recommend for people decades from retirement.

Add stocks and bonds together and only about 56% of the typical saver’s portfolio sits in the two asset classes most planners lean on for long term growth. Roughly a quarter sits in cash, doing very little.

Savers gave three main reasons for holding so much cash.

• Fear of losses – 53% said they are afraid of losing money if the stock market falls
• Diversification – 44% said cash is simply part of spreading out their risk
• Market timing – 33% are waiting for what they consider the right moment to buy stocks

At Vanguard, more than 8 in 10 participants default into target date funds instead, and roughly 7 in 10 of those investors let a single fund run their entire account, a hands off setup built to avoid exactly the cash heavy, fear driven allocation Schroders found.

This Isn’t a New Problem

Schroders is not the only firm chasing this figure. A separate survey published this year by Northwestern Mutual put the comfortable retirement number at $1.46 million, about $260,000 above Schroders’ total.

Schroders’ own past surveys tell a similar story with different faces. Its 2025 poll of Generation X workers found they expected to retire with $711,771 saved, versus the $1,116,747 they believed they needed, a $404,976 gap, the widest of any generation the firm measured that year.

Crossing the finish line does not appear to end the anxiety, either. A companion Schroders study of people already retired found 49% say their expenses are running higher than expected, and 58% have no idea how long their money will last.

Most retirees have nowhere near any of these totals. The typical household age 65 to 74 held about $200,000 in retirement accounts in 2022, according to the Federal Reserve’s Survey of Consumer Finances, the government’s benchmark household wealth study.

Even Schroders plays down the number it just published. “The message is less about that magic number and more about planning and working toward those savings goals,” Boyden said.

A Yardstick Most People Can Actually Reach

Retirement researchers increasingly favor a different kind of benchmark, a multiple of income instead of one fixed dollar figure that ignores where somebody lives or what they earn.

A common rule of thumb calls for saving 10 times your annual salary by age 67. For a household earning the 2024 median income of $83,730, that works out to a little over $800,000, not much more than half of Schroders’ number.

Fidelity’s own savings guidance runs on the same math: a worker earning $125,000 near retirement should aim for about $1.25 million by 67, following that same 10 times formula rather than a single number applied to everyone.

Most current retirees are not funding their lives from savings alone. Many lean heavily on Social Security, and few financial planners believe every household needs $1 million or more just to get by.

Whatever number a saver chases, most Americans are approaching retirement with a fraction of it saved.

Frequently Asked Questions

What Is the Retirement “Magic Number”?

The magic number is not an actuarial calculation. It is what workers say they believe they will need, self reported in surveys such as Schroders’ and Northwestern Mutual’s, which is why the figure shifts depending on who is asked and when, and why competing surveys rarely land on the same total.

Does the Number Include Social Security or a Pension?

No. The dollar figures in these surveys represent personal savings alone, not future Social Security benefits or pension income. That is one reason the targets look so large, since they assume a retiree is funding everything from savings rather than from guaranteed income sources on top of it.

What Qualifies as a 401(k) Hardship Withdrawal?

The IRS allows hardship withdrawals only for an immediate and heavy financial need, such as preventing eviction or foreclosure, paying medical bills or covering funeral costs. A 2022 law also lets workers pull up to $1,000 penalty free once every three years for a personal emergency without documenting the reason, one factor researchers say has made early withdrawals easier to take.

How Much Have Most Americans Actually Saved?

Far less than any of these targets. A 2026 report from the National Institute on Retirement Security found the median retirement savings for working age Americans, a group that includes everyone without any retirement account at all, was about $1,000.

Is $1 Million Enough To Retire Comfortably?

It depends heavily on location, health and lifestyle. Schroders’ separate survey of people already retired found health care alone consumes about 16% of the typical retiree’s monthly income on average. A paid off home, a pension or heavier Social Security income can make $1 million stretch much further, while high medical costs or an expensive city can make it run out sooner.

Disclaimer: This article is for general informational purposes only, not personalized financial advice, and readers should consult a licensed financial advisor since retirement outcomes carry real market risk and vary by individual circumstances; figures are accurate as of publication.