When you hear “$4 million,” does that sound like a dream retirement age or an actual goal? If you’re thinking, “Yes, right!” you are not alone.
Most people are curious to see how they stack up against others when it comes to savings, but few can fathom achieving such a lofty goal. So how many people saved $4 million? And more importantly, do you need that much to retire comfortably? According to a survey, many people think you need even more than this for retirement!
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The reality of $4 million
According to data based on Federal Reserve estimates, a net worth of $4 million puts you in the top 3% of U.S. households. That is certainly an elite group.
Leigh Baldwin & Co. Advisory Services reports that 4,473,836 U.S. households have amassed $4 million or more in wealth. This figure represents approximately 3.44% of all households in the country.
Although this is a small percentage, a recent New York Life survey found that today’s workers believe they need an average of $4.3 million to retire comfortably. The idea of having millions stashed away for your golden years may sound ideal, but the reality is very different for most people.
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Where Do Americans Stand?
Let’s face it: most Americans are nowhere near that kind of savings. Having $1 million in tax-advantaged retirement accounts could put you in the top 3.2% of retirement savers, but most people are far behind this goal.
According to the Federal Reserve Survey of Consumer Finances, the average retirement savings in Americans is $334,000, while the median – a more accurate picture – is just $86,900. While people may feel like they need millions to retire, they aren’t actually saving millions.
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The question of how much you need to retire comfortably comes up again and again among savers. In a Forbes article, Michelle Richter-Gordon, co-founder of Annuity Research and Consulting in New York City, explains, “People don’t know how much they need at all. They don’t know when they’ll retire either.”
The problem is compounded by the fact that many people rely on online retirement calculators to calculate their savings needs. While these tools can be helpful, they often overestimate the amount of money needed, leaving people feeling overwhelmed or discouraged.
Some of these calculators are provided by investment firms, which may want to increase your contributions to grow their income. It’s no wonder that retirement is an uphill battle for many.
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What do you need for your pension?
It’s important to think about your retirement goals. How much you need depends on several factors, such as where you will live, lifestyle choices and healthcare costs.
Many experts suggest that aiming for about $1 million to $2 million in retirement savings may be more realistic for most Americans, especially when we take into account Social Security benefits and other sources of income.
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Even if saving millions of dollars seems like a distant dream, losing hope isn’t necessary. Start setting achievable goals, save consistently, and monitor your long-term financial health. The road to retirement doesn’t have to be intimidating. Ultimately, it’s about making smart financial choices that allow you to live comfortably, not just chasing big numbers.
It’s always a good idea to consult a financial advisor to make sure you’re on the right track to retire where you want, without the pressure of a magic number.
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This article Can you guess what percentage of people have $4 million? Here’s a look at how many people are reaching this major wealth milestone originally appeared on Benzinga.com
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