Retirement planning feels like solving a puzzle with half the pieces hidden. You know you need to save, but how much is enough to secure a comfortable – or even rich – retirement? Here’s what you need to know to put yourself on the right path.
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What does it mean to be ‘rich’ in retirement?
When you’re retired, “rich” is more about peace of mind than yachts and luxury cars. It means you have enough to enjoy life without worrying about outliving your money. Financial experts often define a “wealthy” retirement as having net retirement assets of $1 million or more, excluding your primary residence. This means investments, savings and real estate – minus any outstanding debts.
According to a 2024 survey from Northwestern Mutual, most Americans think they need an average of $1.46 million to retire comfortably. But the actual average retirement savings? Only $88,400. That gap shows that many Americans are far from feeling financially secure about their golden years.
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Where are you? Average pension savings by age
Wondering whether your pension savings is on track? Here’s what the 2022 Federal Reserve Survey of Consumer Finances says average savings looks like in each age range:
Under 35: $49,130
35 to 44: $141,520
45 to 54: $313,220
55 to 64: $537,560
65 to 74: $609,230
75 and older: $462,410
These numbers reflect an increase in savings with age, but are still well below the ideal benchmark of $1.46 million. According to The Pew Charitable Trusts, only 10% of people nearing retirement have at least $1 million in their retirement accounts.
What wealthy retirees have saved
The numbers are slightly higher to be in the top 10% of retirees in terms of net worth. According to a Motley Fool report, the average retirement balance among this group is $900,000 and the average balance is almost $1.3 million. So if you want to join the club of “wealthy retirees,” a seven-figure savings pot is a realistic goal.
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Factors that determine how much you need for your pension
Retirement looks different for everyone and your circumstances and goals will determine the amount you need. Here are some key points to consider when assessing your retirement savings needs:
