Participants in 401(k) and other workplace retirement plans say they’ll need to save $1.2 million to retire comfortably, but 46% expect to have less than $500,000 at retirement, and 23% say they will have less than $250,000.
“The difference between how much money plan participants say they need to live comfortably and how much they expect to have saved is miles apart for most retirement savers,” said Deb Boyden, Head of U.S. Defined Contribution at Schroders. “Without better planning and a roadmap to close the savings gap, a comfortable retirement will be out of reach.”
Schroders reported that 28% of plan participants had no idea how their retirement assets were allocated. Among those who did know, workplace retirement plan assets were divided as follows:
Plan participants cited fear as the chief motivator for holding cash — 66% were afraid of losing too much money if the stock market goes down, and 24% reported they were unsure how to invest their cash holdings.
More than two-in-three (70%) said their workplace plan is their most important retirement asset, 59% wished they received more guidance from their employer on how to invest plan assets, and 42% were working with a financial advisor.
Additionally, 88% were concerned with how the 2024 US presidential election will impact their retirement savings.
The Schroders 2024 US Retirement Survey, conducted by 8 Acre Perspective, queried 2,000 U.S. investors ages 28 to 79, including 780 who currently participate in a workplace retirement plan. The survey was conducted from March 15 to April 5.
