NEW YORK, July 16, 2026, 07:12 (EDT)
Americans now say they’ll need $1.2 million to retire comfortably, down from $1.28 million last year, according to Schroders plc LON:SDR. At the same time, more people are borrowing from their workplace retirement plans: 27% reported taking loans, up from 17%. That’s a 59% jump. The numbers don’t suggest retirement is cheaper—just that household budgets are stretched.
The target dropped 6.3%. Now 51% expect to retire with less than $500,000, up from 48%. Just 30% still think they’ll hit $1 million, flat from 2025. Sixty-nine percent pointed to healthcare, utility, insurance and housing costs as reasons retirement is out of reach for their generation. Meanwhile, 55% said they couldn’t save 10% of pay due to other expenses. The bar’s lower. Progress hasn’t moved.
Retirement asset managers are watching flow numbers closer than the survey’s main result. Twenty-seven percent of people in the survey said they cut their contribution rates, up from 19%. That’s notable since 74% said their workplace plan is their top retirement asset. Lower contribution rates mean less new cash for funds. Loans also take money out of the market. Both slow asset growth for managers relying on fees from assets under management, and that can bite even during rising markets.
Plan-behavior data shows the one-year change most clearly:
| Measure | 2025 | 2026 | Change |
|---|---|---|---|
| Estimated comfort target | $1.28 million | $1.20 million | -6.3% |
| Expect less than $500,000 | 48% | 51% | +3 points |
| Cut contribution rate | 19% | 27% | Up 8 points, or 42% |
| Borrowed from workplace plan | 17% | 27% | Up 10 points, or 59% |
| Workplace plan is most important asset | 69% | 74% | Up 5 points |
| Equity allocation | 31% | 27% | Down 4 points |
| Cash allocation | 23% | 26% | Up 3 points |
Source: Schroders 2025 and 2026 U.S. Retirement Surveys. Allocation numbers are for people who said they understood where their retirement assets were invested.
More plan borrowers are taking out loans to pay down debt than for emergency costs. Debt repayment was the top reason for 36% of borrowers, up from 25% in 2025. The portion using loans for living costs climbed to 27% from 22%. About a third said they now have more in credit-card debt than in retirement savings. “Rising costs are forcing tough tradeoffs, and saving for retirement is often the first thing that gets deprioritized,” said Deb Boyden, Schroders’ head of U.S. defined contribution. Schroders
A change in allocation made for some downward pressure. For those who reported their investment breakdown, cash was almost level with stocks, 26% to 27%. Last year, it was 23% cash and 31% equities. Over half of the 2026 respondents with cash said they were avoiding stocks out of concern for losses. Another 33% wanted to wait for a better entry point. That means less of their portfolio is set to capture potential long-term market gains.
The wealth rankings put the $1.2 million goal in a different light. A July 14 look at the Federal Reserve’s latest Survey of Consumer Finances, done in 2022, shows the top 10% of retirement accounts start at $463,000, while the top 5% hit $923,400. Adjusting those for inflation from June to June brings them to about $522,000 and $1.04 million, up 12.7%. That means even the inflation-adjusted top 5% lags the Schroders $1.2 million target by about 13%.
Income is tougher to hit than a percentile rank. The 4% rule, which starts withdrawals at 4% of assets in the first year, gives this comparison:
| Benchmark | Approximate balance | First-year withdrawal at 4% | Share of $1.2 million |
|---|---|---|---|
| Half say they’ll come in under | $500,000 | $20,000 | 42% |
| Fed’s bar for top 10% | $522,000 | $20,900 | 43% |
| Fed’s bar for top 5% | $1.04 million | $41,600 | 87% |
| Schroders comfort level | $1.20 million | $48,000 | 100% |
| Northwestern Mutual comfort level | $1.46 million | $58,400 | 122% |
These Fed-based thresholds rely on a third-party read of the 2022 survey, adjusted by CPI-U from June 2022 through June 2026. The withdrawal numbers just show the math and aren’t predictions or investment advice.
A 4% withdrawal rate on a top-10% portfolio gives about $20,900 the first year, not even half the $48,000 someone could take from $1.2 million. But setting one target for everyone doesn’t fit people with different pensions, Social Security and budgets. “If you’re not on track to get to that number, you’re going to say, ‘Well, I can’t,’ and you’re just going to give up,” said Eric Sondergeld, managing director at Greenwald Research. plansponsor.com
Other research is trending higher. Northwestern Mutual’s April poll showed the average savings target at $1.46 million, rising from $1.26 million projected for 2025. Almost half, or 48%, said they worry about outliving their savings. “The new ‘magic number’ reflects a convergence of factors, from persistent inflation and longer life expectancies to uncertainty about the future of Social Security,” chief field officer John Roberts said. Newsroom | Northwestern Mutual
Still, the year-on-year comparison has its own caveats. Schroders polled different groups both years—602 in 2025, then 615 in 2026—instead of tracking the same people. The studies don’t say how much participants borrowed or if those loans got paid back. They also don’t show any change in total account balances. There’s no data on national contributions or any projection for Schroders’ revenue either.
The main issue for investors isn’t if $1 million or $1.2 million is the right number. What matters is whether people keep putting money into their workplace accounts. If contributions and plan loans stay down, the lower target just means people see they can’t save as much.
