Only 2% Have More Than $1M Saved for Retirement: Why That Milestone Matters

Calculator on american dollars.
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While a million-dollar retirement might be the goal for most, it becomes a reality for only a privileged few.

A new GOBankingRates survey of more than 1,000 adults found that only around 2% of people have $1 million or more saved for retirement. Comparatively, one in five has less than $10,000 and another 29% have nest eggs containing exactly zero dollars.

In total, more than two out of three people have less than $100,000 waiting for them on the other side of their careers.

Needless to say, the 2% with two-comma nest eggs are in much better shape — but even many of them can’t rest on their laurels, considering just how long and expensive retirement has become. While it’s true that $1 million doesn’t go as far as it used to, the seven-figure mark is still an important financial milestone.

Here’s why.

The Feeling of Having Made It: ‘Millionaire’ Still Has a Nice Ring

In an era where titans like Elon Musk can gain or lose billions of dollars in a single day, $1 million doesn’t carry the weight it once did. But still, most people will never achieve millionaire status, so those who do have a trophy worth polishing even if it no longer guarantees a rich retirement.

“It’s more aspirational than accurate in most cases,” said Ajay Singh, a former financial lawyer and current managing director of RetireBetter. “The $1 million milestone is really a reflection of how we’ve always defined success. Think about how we frequently refer to a successful person as being a millionaire. So having $1 million set aside for retirement allows retirees to have a sense of security and achievement.”

Make Your Money Work Better for You

That psychological triumph can go a long way in making up for the fact that a one with six zeroes no longer guarantees you’re set for life.

“In the past, $1 million had more purchasing power due to lower living costs and inflation,” said Baruch Silvermann, CEO of The Smart Investor. “Over time, it has become a benchmark because it represented a substantial sum in previous generations. People continue to use it as a reference point, even though the actual amount required for retirement varies based on individual circumstances and economic conditions.”

$1 Million Is a Worthy Goal That’s Easy To Obsess Over

If a retirement calculator reveals you’ll need, say, $865,327 to retire according to your lifestyle goals and timeline, you might have a hard time converting that number into a morning mantra.

But no one can let a million bucks slip out of their aspirational crosshairs.

“One million dollars is a rounded figure that is easily memorable and practical,” said Silvermann. “It serves as a psychological anchor point that simplifies retirement planning for many individuals. Also, setting and monitoring a goal becomes more manageable for people when it’s a neat, round number.”

It Might Not Buy What It Used To, but $1 Million Isn’t Too Shabby

The U.S. is home to nearly 22 million millionaires — and many of them are so rich that they’d panic if they woke up tomorrow with $1 million to their name.

But they’re the exception — the average Joe can still make a million bucks go a long way if he tries.

Make Your Money Work Better for You

“One million dollars can still constitute a substantial nest egg,” said Silvermann. “Especially when managed and invested wisely. It can generate a reliable income stream to cover living expenses throughout retirement, ensuring financial stability during extended retirement periods.”

According to the 4% rule, $1 million is enough to spend $40,000 a year for 30 years. When you factor in Social Security and the fact that spending typically decreases in retirement, that’s more than sufficient for much of America.

$1 Million Buys High-Net-Worth Access

For all but the wealthiest retirees, $1 million removes nearly all the financial worry from post-career life.

“It provides a large nest egg that can generate ongoing income in retirement,” said Fluent in Finance founder Andrew Lokenauth, a 15-year Wall Street veteran who held leadership positions at JP Morgan, Goldman Sachs and Citi. “It allows greater flexibility and security even in volatile markets and enables retirees to maintain their standard of living.”

But $1 million also provides the money and the access needed to continue investing in retirement to build generational wealth for your posterity. 

That’s because a $1 million net worth is one of the prerequisites for earning the coveted status of accredited investor, which opens the door to a whole new universe of investment opportunities that aren’t regulated by the SEC.

Your Money Won’t Have To Work Nearly as Hard for You

The best nest eggs contain money that makes money. Whether you’re drawing from dividend income, annuity payouts, crowdfunding returns or rental income, downturns and disappointments are inevitable — and retirees on shoestring budgets can’t withstand many of either.

But once you have $1 million, you can afford to take a few hits on risky investments or, conversely, play it extra safe and settle for subpar yields thanks to your impressive principal.

Make Your Money Work Better for You

“The $1 million mark is often seen as a significant milestone for retirees, as it may be enough to cover living expenses and provide retirement security,” said 10-year finance industry veteran Scott Allen, licensed agent and co-founder of Seniors Life Insurance Finder. “It also gives retirees the peace of mind that they have enough money to last throughout their retirement years without having to worry about running out of funds. With inflation over time and rising costs associated with healthcare, the $1 million mark is often considered a desirable goal for many retirees.”

In the end, a million bucks provides a whole lot of breathing room for all but the richest among us.

“Possessing $1 million offers retirees the flexibility to select the lifestyle they desire,” said Silvermann.

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