Only about 1.8% of U.S. households have $2 million or more in retirement savings, according to data from the Employee Benefit Research Institute (EBRI) and the Federal Reserve. While the average net worth for those aged 65-74 is higher ($1.79 million), it is skewed by high earners, as many more households have significantly less.
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.
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.
Bottom Line. A retirement account with $2 million should be enough to make most people comfortable. With an average income, you can expect it to last 35 years or more.
Suze Orman famously suggests many people need $5 million to $10 million to retire comfortably, especially for early retirement, to cover longevity, inflation, and healthcare risks, calling smaller amounts like $1 million or $2 million "nothing" against catastrophes. She emphasizes having 3 to 5 years of living expenses in cash reserves, separate from investments, and stresses a high savings rate (around 15%) and delaying Social Security for maximum benefit. While her large figures target a very secure, risk-averse retirement, she also advises on saving significantly more than typical projections suggest.
Very few people retire with $4 million; it's a rare milestone, placing someone in the top tier of wealth, likely the top 2-3% of households, but far from the ultra-wealthy, with most Americans having significantly less (median retirement savings around $87k). Reaching $4 million requires extreme discipline, starting early, consistent investing, and living below one's means, making it an exceptional achievement, not the norm.
Achieving a $2 million nest egg for retirement is relatively uncommon among Americans. According to the Employee Benefit Research Institute, less than 2% of households have $2 million or more saved for retirement.
Your net worth is what you own minus what you owe. It's the total value of all your assets—including your house, cars, investments and cash—minus your liabilities (things like credit card debt, student loans, and what you still owe on your mortgage).
9 Signs of Wealth to Look Out For
Upper class (75th to 90th percentile): $714,000 to $2.1 million net worth. Wealthy (90th percentile and above): Over $2.1 million net worth.
The top ten financial mistakes most people make after retirement are:
What Does it Take to Be Among the Wealthiest Retirees?
September 10, 2024 | Suze Orman
(Note, if you leave a job and are at least 55 you can make withdrawals from your 401(k) without being hit with the 10% early withdrawal penalty. That said, I am not endorsing tapping retirement savings at such a young age.)
"I just returned to my Bahama Island Home and was over the moon when I saw my new SYNLawn installed backyard!" proclaimed Mrs. Orman.
According to the 2020 Census, the average retirement income for couples is less than $101,500. What is a good retirement income for a couple? A good retirement income is subjective. The median retirement income is currently $72,800 annually.
In addition to saving money on taxes, homeowners can increase their wealth by building equity in their homes. Each month, part of your mortgage payment goes into paying off the principal portion of your loan. Over time, as you make monthly payments, you may build increasing equity in your home.