In Austin Powers: International Man of Mystery, Dr. Evil famously tries to hold the world hostage for a ransom of $1 million. And if you asked most Americans what they’d need to retire comfortably, you might get the very same number — at least according to TD Ameritrade’s 2019 Retirement Pulse Survey.
The survey polled adults aged 23 and older with investable assets of $10,000 or more. Respondents were asked about their progress on retirement savings, their willingness to cut expenses to save more, and whether $1 million would be enough for a comfortable retirement. To the last question, six of 10 respondents across all age groups said yes.
Nearly 90% of those polled also said they’d be willing to make trade-offs today to catch up on their retirement savings. Some of those trade-offs included packing lunch instead of buying it, making coffee at home, and downsizing housing expenses. But are those tweaks enough to ratchet up your savings to seven figures over time?
The answer depends on how much you’ve saved so far, and how much time you have between now and retirement. An analysis by Fidelity calculates the average 401(k) balance at $103,700 and the average IRA balance at $107,100. Using $100,000 as a starting point, then, let’s look at three scenarios that can take you to $1 million in savings. All three assume a 7% return on your invested funds.