The answer for the 553 investors who participated in the MLIV Pulse survey is between three and five million dollars. A third of the surveyed investors believe three million dollars are sufficient, while another third believes the ideal sum is still closer to five million dollars.
Most people surveyed are confident they will be close to retirement by 2023, with more savings than last year. In 2022, inflation and rising borrowing costs made stocks less valuable, and as bond prices fell, the average retirement account in the United States fell 20%.
This year, both professional and retail investors expect stocks and bonds, moving in opposite directions, to re-establish their normal relationship, with fixed income cushioning the potential losses of riskier assets.
Investors are suspicious
Respondents were still determining whether they would eventually have enough savings to maintain their lifestyle in retirement. Less than half of the investors said that the chances of this are 100 percent.
According to Christine Benz, Director of Private Finance and Retirement Planning at Morningstar, it’s common for many future retirees to have doubts about the sustainability of their savings.
If inflation slows, it still increases the number of funds needed for retirement, Benz says.
Of course, a seven-figure saving is out of reach for many future retirees in the U.S. According to the Bureau of Labor Statistics, about two-thirds of U.S. private-sector workers had access to a workplace retirement savings plan in 2021. The average account balance of employees with a retirement plan was $112,572 at the end of 2022, and the median amount was just $27,376.