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US Workers Say They Need $1.8M for Retirement

A new survey of people who have 401(k) plans found that it’s getting harder to put money away as costs rise.

(Bloomberg) -- Workers are finding it harder to save for retirement, even as the amount they need keeps rising.

The average savings target in the US is now $1.8 million, according to a nationwide Charles Schwab survey released Wednesday. That’s up from $1.7 million a year ago.

Nearly 80% of the 1,000 401(k) plan participants surveyed said inflation and market volatility were getting into the way of saving more this year, and 36% of those respondents said they’d retire later than planned as a result. 

The year-over-year overall retirement target in the Schwab survey isn’t a huge change, at about 6%, but the percentage of workers who think it’s “very likely” they’ll reach that goal fell to 37% from 47% a year ago, and from 53% in 2021.

Read more:  Retirement Savings Shortfall in US Will Cost $1.3 Trillion

Americans are facing a massive retirement shortfall, and potential cuts to Social Security benefits could make matters worse. A recent report from Vanguard found that the average balance for Vanguard defined contribution plan participants was $112,572 at the end of last year, and the median was $27,376. At Fidelity Investments, the average 401(k) balance was $108,200 in the first quarter of 2023. 

To contact the author of this story:
Suzanne Woolley in New York at [email protected]

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