Is retirement achievable? Investors say they’ll need at least $3 million.

Saving $1 million for retirement may have once held the promise of financial security, but today, even millionaires are expressing concern they might not have enough money for their golden years. More than 1 in 3 millionaires said it would “take a miracle” for them to retire securely, according to a 2022 survey from Natixis Investment Advisors. As for what it would take to step back from the workforce without financial worries, a new study from the Bloomberg MLIV Pulse may have an answer: More than 7 in 10 investors said they would need between $3 million and $5 million to retire comfortably. The findings underscore that anxieties are on the rise about retirement, especially after a year of brutally high inflation and negative investment returns. Workers are boosting their expectations of how much they’ll need to sock away in response to growing economic uncertainty — even as the typical American has saved far less than $1 million for retirement. “One of the key challenges we see is managing toward an unknown. We don’t know what prices will be in the future, we don’t know how long we’ll live, and all of that factors into anxiety,” David Goodsell, executive director of the Natixis Center for Investor Insight, told CBS MoneyWatch. There’s a good reason why millionaires may be worried about retirement. Using the 4% rule — withdrawing 4% of one’s total retirement assets in the first year of retirement, and then 4% plus the inflation rate after that — translates into starting retirement with an income of $40,000 a year for someone with a $1 million saved. “I think a lot of people are shocked” when they see that figure, Goodsell said. “A lot of people have that belief that $1 million is enough.” Of course, expectations for retirement are based on one’s income and savings in earlier decades, and millionaires and other high-net-worth individuals may have richer goals for their retirement income than others. The Bloomberg MLIV Pulse survey, where investors said they need between $3 million to $5 million to retire, is based on a poll of Bloomberg customers, who tend to work in finance and thus typically have higher incomes than average workers.

Rethinking retirement

The financial pressure of making your nest egg last through 20 or 30 years of retirement may feel overwhelming, but Goodsell noted that many Americans may end up refashioning their idea of retirement by developing new financial strategies. “A more typical thought is, ‘I’m going to sit back and play golf every day,’ but that might not be a good idea for everyone,” he noted. Instead, some workers may want to continue to work part-time, open a small business or invest in property for rental income, he noted. While younger workers tend to be more optimistic about retirement than older Americans, they may want to study the experiences of baby boomers to help them plan, Goodsell noted. For instance, millennials said they believed they would retire at 60, but baby boomers — many of whom are already at retirement age — peg their retirement age at 65, a Natixis survey found. Older workers may be faced with a late-career layoff and struggle to find a new job, or need to take time off from work to take care of older relatives, he added. Even though socking away enough to retire may seem daunting, Goodsell noted that it’s important to keep saving. And if you have access to corporate benefits, take advantage of programs like company 401(k) matches and automatic bumps in your contribution rate, such as automatically boosting your retirement contribution by 1 percentage point per year, he recommended. Goodsell noted: “The simple thing is to save as much as you can, but that is sometimes easier said than done for folks.”