Very few Americans have $4 million in retirement savings; it's a rare achievement, with estimates suggesting only a small fraction of households (around 0.1% to 0.2%) have $4 million or more in total wealth, and even fewer in just retirement accounts, placing it in the top percentile, far above the typical $86,900 median savings.
How Many Retirees Actually Have $4 Million Saved? The number of retirees with $4 million or more in savings is relatively small. Using data from the Federal Reserve's Survey of Consumer Finances (SCF), the Employee Benefits Research Institute estimates that only 4.7% have $1 million or more saved for retirement.
Data from the Employee Benefit Research Institute, which utilizes the Federal Reserve's Survey of Consumer Finances, indicates that only about 0.1% of retirees have over $5 million saved for retirement. Additionally, about 3.2% have savings exceeding $1 million.
Research shows that less than 1% of households have $3 million or more in retirement savings. While this amount is uncommon, those who consistently invest, save diligently and manage their spending can build significant retirement assets over time.
They separated households that met the accredited investor definition into those with $1 million or more in qualified savings, which they dubbed “401(k) millionaires,” and all other accredited investor households.
According to estimates based on the Federal Reserve Survey of Consumer Finances, a mere 3.2% of retirees have over $1 million in their retirement accounts. The number of those with $2 million or more is even smaller, falling somewhere between this 3.2% and the 0.1% who have $5 million or more saved.
Key Takeaways
According to the Federal Reserve Survey of Consumer Finances (SCF), just 3.2% of retirees have reached $1 million or more in their accounts (1). This is troubling news if you count yourself among the 40% of retirees who say they'll need at least $1 million for true financial security in retirement (2).
Yes, a $4 million net worth is considered very rich in the U.S., placing you in the top few percentiles of households, far above the median, offering significant financial security, lifestyle options, and legacy potential, though it's not ultra-high-net-worth and its sufficiency depends on location and spending habits.
Becoming a 401(k) millionaire represents a significant milestone in retirement planning. According to recent data, the average age at which individuals attain this status is 59 years old, typically after 26 years of consistent contributions to their retirement plans.
If you leave work at 61, the average retirement age as of the latest Gallup data, you'll have more than enough to see you through to a life expectancy of 90 or even 100. Across 29 years, $4 million could equate to a generous $11,494 a month.
In the organisation's super balance update, it found 2.5 per cent of the population have a super account of more than $1 million, as of June 2021. This represents 417,567 individuals, ASFA said, and is a 29 per cent increase from the 322,200 individuals who held over $1 million in June 2019.
The short answer: to retire on $80,000 a year in Australia, you'll need a super balance of roughly between $700,000 and $1.4 million. It's a broad range, and that's because everyone's circumstances are different.
The benchmark reflects the longer time savings must last and the delay in Social Security eligibility. For someone expecting to spend $60,000 annually in retirement, that would mean accumulating roughly $2 million in savings by age 55.
To know how much you need in your 401(k) to retire, aim for 10 times your salary by retirement age (around 67), using benchmarks like 1x income by 30, 3x by 40, 8x by 60, but your actual number depends on your lifestyle, spending, and other income (Social Security, pensions). A common goal is needing 80-85% of your pre-retirement income annually, so use a retirement calculator or the "Rule of 25" (25x first-year expenses) as guides, adjusting for your unique situation.