A 2019 report from GOBankingRates found that $1 million will last 19 years in retirement. But a recent survey found that Americans are saving more than that. That’s probably a good thing, because $1 million may not go as far as it used to.
A survey from Schwab Retirement Plan Services earlier this year showed that, on average, 401(k) plan participants believe they need to save $1.9 million for retirement.
According to Nathan Voris, director of business strategy at Schwab Workplace Financial Services, that’s a good number.
“That’s a ballpark range for a wide range of folks,” Voris told GOBankingRates. “Obviously, retirement is not one-size-fits-all, but that’s sort of the middle of the range for a lot of people.”
Several factors will affect how much someone will actually need in retirement, however.
“There’s so much written about that, but I boil it down into just a couple of things. One is, when do you want to retire?” Voris said. “If you’re going to retire at 50, you need to plan for 45 years of living expenses. If it’s 67, you need to plan for 30 years. That has a huge factor in what your plan should be.”
Previous data analyzed by GOBankingRates showed that Georgians can live off $1 million for 22 years, 0 months and 9 days.
But that may no longer be enough.
“Retirement could be a long time,” Voris said. “That idea of 20 years in retirement, that was maybe tied to that $1 million number. That’s sort of not a realistic expectation anymore. That 4% rule, that $80,000 income bogey is still out there, but you could be retired for 25, 30, 35 years.”
SmartAsset has tips on how to make $1 million last 30 years in retirement. They include earning more interest on your savings, having the right insurance products and planning for health care expenses. Taking these steps will likely make $1.9 million in savings stretch further, too.
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