Personal Finance

How Many Americans Have Banked a Cool $1 Million for Retirement?

Joey Frenette

Published: December 10, 2024 12:07 pm

A $1 million retirement seems like a worthy retirement target worth shooting for, even if it seems a tad far-fetched to envision oneself as a millionaire in one’s earlier earning years. Undoubtedly, starting a career with a smaller wage, straddled with student loan debt, can make a $1 million retirement seem like a pipedream of sorts.

That said, with a sound financial plan (if you don’t yet have one, a financial advisor could help you formulate one) and prudent cost management, the journey to $1 million (and beyond) is more than achievable by the traditional retirement age, even in today’s inflation-rattled environment. Just how many Americans have already hit the lofty retirement target?

According to the Employee Benefits Research Institute, just north of 3% of Americans have banked at least $1 million in retirement accounts, while 4% have banked between $500,000-$999,999. Unsurprisingly, most Americans (almost 59%) have less than $10,000 in retirement accounts. High inflation deserves to bear most of the blame.

Key Points About This Article

• Just a small chunk of Americans have $1 million or more in retirement accounts.
• Inflation and high rates have made it tougher to stay on top of one’s expenses, let alone contribute to retirement accounts. Having a financial plan is key to getting things back in order.
• Also: Take this quiz to see if you’re on track to retire ^(Sponsored)

It’s become a lot harder to save in recent years.

Undoubtedly, it’s become considerably harder to save up for retirement with the ever-rising costs of living. Even if inflation has cooled below 3%, the trip to the grocery store or shopping mall is no less painful today than when inflation was at its worst.

Unless you’re shopping at Walmart (NYSE:WMT) or someplace similar, last year’s hefty price hikes have likely not been rolled back. And if the Trump administration follows through with tariffs (25% on goods imported from Mexico and Canada along with an additional 10% on goods coming from China), I’d say there’s a good chance that inflation could rise by enough to become a problem again.

Of course, there really is no way to tell if Trump and his team will follow through with proposed tariffs. Indeed, tough tariff talk can certainly give one leverage at the negotiating table. Either way, potential tariffs aren’t to be taken lightly as they look to apply inflationary pressure on a nation that’s already had enough of it in the past few years.

When the costs of necessities keep moving higher, it becomes harder to pay oneself off, especially for those paying higher rates on outstanding debts or those living on a fixed income. Add the high costs of healthcare into the equation, and it’s a wonder that 3% of Americans have managed to stash away $1 million or more in a retirement account.

Investing could be key to moving towards that $1 million retirement mark.

For the 20.5% of Americans having between $10,000 and $99,999 in retirement accounts, there’s a realistic pathway towards hitting the $1 million milestone. It’s important to stay on top of things by “paying oneself first” if one has extra cash at the end of each month.

Whether that entails making 401k contributions (with or without employee matches) and investing the proceeds or chipping away at high-interest debt, it’s essential to have a plan in place to reach your personal retirement goal. So, if you’re aiming to land a cool $1 million retirement fund or more (like the 3% or so of Americans), a financial planner can be a great place to set things on track, even in the face of more inflation and economic unknowns.