An overwhelming majority of U.S. households with $2 million or more in investable assets are confident they won’t run out of savings if they live to 90 years old, says LIMRA. The problem is, most households don’t have that level of savings.
LIMRA recently surveyed Americans ages 40 to 85 with at least $100,000 in household investable assets to explore their perceptions about retirement income and their confidence in their retirement security.
LIMRA found between 80% and 90% of households with $2 million plus strongly agree (51%) or somewhat agree (32%) they are confident they won’t run out of money by age 90, said Matt Drinkwater, LIMRA’s corporate vice president of Annuity and Retirement Income Research.
But that kind of confidence begins to drop off significantly for investors who have between $1 million and $2 million saved. In that group, only 28% strongly agreed and 42% somewhat agreed. Not surprisingly, confidence sinks further for those with only $100,000 to $249,000 in investable assets — only 12% strongly agreed and 29% somewhat agreed that their “savings and investments won’t run out if I live to be 90 years old.”
Relatively few households with enough assets
Among the 47 million households headed by someone age 60 or older, 7% had household investable assets of at least $2 million, Drinkwater said. Only 6% of the 89 million households in the U.S. headed by someone 40 to 85 years old has that amount, Drinkwater said.
He added that percentage drops to 4% when all 128 million U.S. households are included. Investable assets primarily include investment accounts, IRAs and defined contribution plans. The figures are based on LIMRA’s 2019 Survey of Consumer Finances, adjusted to 2022 asset levels.
Income expectations dropping
Among retirees who responded to the recent survey, 70% say that their households receive enough income from various sources to cover the household’s basic living expenses. But for future retirees, only 44% expect to receive enough income from Social Security, traditional defined-benefit pension plans, and/or lifetime-guaranteed annuities to cover their household’s basic living expenses.
Regardless of their household income sources, workers overwhelmingly agree that lifetime-guaranteed income can provide peace of mind. LIMRA research shows this sentiment is on the rise. Among both retired and non-retired Americans surveyed, a larger proportion (86%) in 2022 said having lifetime-guaranteed income gives them peace of mind in retirement, compared with 76% in 2018.
Rising interest in annuities
LIMRA research shows interest in annuities had been level or down for much of the last decade, reaching a low of 33% in 2018. But in 2022, for the first time, a majority of workers (51%) said they would consider converting a portion of assets into a lifetime-guaranteed annuity in retirement. In 2022, annuity sales hit records and commission-free products grow in popularity.
“The ongoing decline in pensions could partly explain why workers feel they will not have enough income, but other factors like uncertainty about Social Security benefits, market volatility, and the rising cost of living, are undoubtedly playing a role,” Drinkwater said. “There has been significant disruption in the economy and the finances of many Americans over the past several years, so it is to be expected that workers nearing retirement will increasingly feel uncertain about their ability to make ends meet throughout their retirements. In a time of extreme instability, the perceived value of investments offering stability, and the peace of mind that comes with it, can’t be underestimated.”
LIMRA research indicates that 49% of immediate annuity buyers in 2020 were age 71 or older; only 5% were under age 55, Drinkwater said. But deferred income annuity buyers skew younger, with 23% under age 55, and only 6% age 71 or older, Drinkwater said.
FAQs
While retiring with a $2 million nest egg might seem rare, it's closer to what many Americans now believe they need to retire comfortably. A survey from Northwestern Mutual reveals that Americans feel they need $1.46 million for a comfortable retirement, a number that has surged by 53% since 2020.
Is a net worth of 2 million enough to retire? ›
A $2 million nest egg can provide $80,000 of annual income when the principal gives a return of 4%. This estimate is on the conservative side, making $80,000 a solid benchmark for retirement income with this sum of money.
What percentage of people retire with $2000000? ›
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
What percentage of retirees have $1 million dollars? ›
According to the Federal Reserve's latest Survey of Consumer Finances, only about 10% of American retirees have managed to save $1 million or more. This leaves a significant 90% who fall short of this milestone.
Is $2.5 million enough to retire at 55? ›
It probably is possible for most people to retire at age 55 if they have $2.5 million in savings. The ultimate answer, though, will depend on the interplay between various factors.
Is a net worth of 2 million considered wealthy? ›
Being rich currently means having a net worth of about $2.2 million. However, this number fluctuates over time, and you can measure wealth according to your financial priorities. As a result, healthy financial habits, like spending less than you make, are critical to becoming wealthy, no matter your definition.
Can I live off the interest of 2 million dollars? ›
Summary. $2 million is far above the average retirement savings in the US. $2 million should afford you to enjoy a comfortable and happy retirement. If you choose to retire at 50, a retirement savings fund of $2 million would provide you with $50,000 annually.
What is considered a wealthy retirement? ›
Super wealthy (99th percentile): $16.7 million. Wealthy (95th percentile): $3.2 million. Well off (90th percentile): $1.9 million. Middle class (50th percentile): $281,000.
What percentage of Americans have over 2 million dollars of assets? ›
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
What does the average American retire with? ›
What are the average and median retirement savings? The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000. Taken on their own, those numbers aren't incredibly helpful.
By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.
What is the average net worth of a 60 year old couple? ›
Average net worth by age
| Age of head of family | Median net worth | Average net worth |
|---|
| 45-54 | $247,200 | $975,800 |
| 55-64 | $364,500 | $1,566,900 |
| 65-74 | $409,900 | $1,794,600 |
| 75+ | $335,600 | $1,624,100 |
2 more rowsMay 29, 2024
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- People with the top 1% of net worth in the U.S. in 2025 will have $11.6 million in net worth.
- The top 2% will have a net worth of $2.7 million.
- The top 5% will have $1.17 million.
- The top 10% will have $970,900.
- The top 50% will have $585,000.
At the 4% annual withdrawal, a retiree with $2 million would generate $80,000 per year or $6,666 per month. “This must cover mandatory monthly spending, mandatory annual spending (like property taxes and insurance if you own your own home) and also income taxes,” Wagner says.
How long will a 2 million dollar 401k last? ›
It will make a huge difference in how long your retirement savings will stretch. A retirement account with $2 million should be enough to make most people comfortable. With an average income, you can expect it to last 35 years or more. However, everyone's retirement expectations and needs are different.
What does a 2 million dollar retirement look like? ›
Meanwhile, a $2 million retirement account will provide you 25 years of $80,000 in annual income -- based on the 4% retirement rule. In general, the rule says that you should only withdraw up to 4% of your retirement savings each year, and adjust for inflation annually, to make your savings last for about 30 years.
At what age can I retire with 2 million dollars? ›
Retiring at 65 seems like a typical target, but it takes careful planning and a sufficient nest egg to pull off. If you accrue $2 million during your career, you can pay yourself $80,000 annually without touching your principal, which translates to a healthy monthly budget.
What percentage of households have a net worth over 2 million? ›
Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth. Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million. Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.
What is a good net worth to retire with? ›
The final multiple — 10 to 12 times your annual income at retirement age. If you plan to retire at 67, for instance, and your income is $150,000 per year, then you should have between $1.5 and $1.8 million set aside for retirement.
How much will a $2 million annuity payout? ›
The amount a $2 million annuity pays depends on factors such as whether you want your monthly lifetime income payments to start immediately or, say, 10 years from now. Currently, a $2 million annuity will likely pay between $10,000 to $20,000 a month for the rest of your life.
