Americans with a 401(k) retirement plan were asked how much they needed to save to pay for their retirement. The answer they gave was $1.7 million dollars.
That number may seem like a lot to many, especially considering that a quarter of Americans have no retirement savings at all.
But that’s actually a lower goal than the estimate workers gave when asked the same question a year ago, according to a new survey by financial services company Charles Schwab’s Retirement Planning Services.
In 2021, workers said they thought they would need $1.9 million to retire.found the survey.
Americans are likely to lower their retirement savings goals after two years of the pandemic, prompting many to cut spending by postponing vacations and cutting back on meals and entertainment expenses, said Catherine Golladay, CEO and CEO. Charles Schwab Financial Services. Likewise, in 2022, workers have been affected by inflation, which they now see as their main obstacle to saving for their golden years.
“Inflation was really evident in what’s on the minds of 401(k) investors. That finding was something we’ve seen for the first time in a long time,” Golladay told CBS.
Inflation overtook stock market volatility as the main obstacle to savingeven after the Stock Market fell into a bear market earlier this year.
Some 45% of those surveyed said inflation is their main obstacle to retirement, while 33% pointed to market volatility, according to the survey of 1,000 people with 401(k) retirement plans.
401(k)s and 403(b) retirement plans had about $141,000 in savings in 2021 on average, according to CBS. But older workers have much more money saved, with a median balance for those between 55 and 64 years of age of $256,000. Still, that’s a far cry from the $1.7 million they say they need.
Some 47% said they were extremely likely to reach their retirement savings goal, but that’s down from the 53% who answered the same last year. The remaining workers said they were unsure or only “somewhat sure” that they could save their target amount.
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