Getting By on Less Than $1 Million in Retirement Savings
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What is the main topic discussed in this episode?
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Here's your money briefing for Tuesday, March 28th.
How common is it to retire with less than $1 million in savings?
I'm J.R. Whelan for The Wall Street Journal.
What do typical 401(k) and IRA balances look like before retirement?
A million dollars in retirement savings is the number that people hope to achieve by the time they leave the workforce. Problem is, most people don't come close.
Typical families, 401k and IRA investments accounts come to slightly less than half a million. So the typical balance is about $413,000 on average.
Retirement reporter Ann Turgason spoke to several people about what retirement looks like with far less than a million dollars in savings. We'll talk to her after the break.
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How do retirees with under $1M describe their quality of life and income sources?
They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
When people think about retirement, often the first number that comes to mind is $1 million in savings to live on after their working years are done. But most of us won't retire with anything close to that. Wall Street Journal reporter Anne Turgason spoke with people, many of whom have retirement savings well below $1 million, to see how they're making do. Anne, thanks very much for being with us.
Why is Social Security critical for those with smaller retirement savings?
Thanks for having me.
So Anne, a lot of people dream of building up $1 million in savings for retirement. But in reality, where do people typically come in on the retirement savings scale?
Well, according to some of the sources that I rely on heavily, a typical family's 401k and IRA investments accounts come to slightly less than half a million on average in the years leading up to retirement or for some people in retirement, which is about 55 to 64 years old. So the typical balance is about $413,000 on average.
So how does that change the retirement picture for people?
Yeah, so there's really nothing magical about a million dollars. I mean, people have different lifestyles. People spend more, people spend less. You know, $1 million can be insufficient for somebody who spends a lot. It can be more than enough for someone who doesn't spend much. All things considered, the less that you save, the more at risk you're going to be if a situation comes along that
What practical steps can workers take now to boost retirement readiness?
is like an unforeseen economic shock or a setback in life for example maybe an unforeseen health issue that requires you to spend a lot of money on a home health aid or something it's going to be a much harder blow to absorb the less money that you have to save and I think also people who save less are probably a little bit more at risk to worrying about outliving their money.
Yeah. And, you know, who wouldn't want to have a million dollars when they're set to retire, right? But having less than a million dollars, far less than that, is more in line with the rest of us. And you and your reporting team, you spoke with people with savings in that range, less than a million dollars. Tell us about how they're getting by.
I felt like they all have really, really interesting stories. They have very interesting lives, very fulfilling lives. And I think that they're all getting by really pretty well. I mean, I need to emphasize that when we focus on less than a million dollars in savings and we include both 401k, IRA and pension wealth in that savings number.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:36
2
How common is it to retire with less than $1 million in savings?
0:36–0:41
3
What do typical 401(k) and IRA balances look like before retirement?
0:41–1:25
4
How do retirees with under $1M describe their quality of life and income sources?
1:25–2:19
5
Why is Social Security critical for those with smaller retirement savings?
2:19–3:19
6
What practical steps can workers take now to boost retirement readiness?
3:19–4:22
7
How should retirees think about asset allocation and market volatility?
4:22–5:22
8
What personal strategies and supports help people make ends meet in retirement?
5:22–8:44
Speakers
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