Have you ever wondered how many people actually retire with $5 million? It’s a big number and as the cost of living rises, more people are curious about what it really takes to feel financially secure in retirement. While it’s often seen as the gold standard for a worry-free future, the reality is that only a small percentage of Americans reach this level of wealth.
In this article, we’ll break down just how rare a $5 million retirement really is, how it compares to average savings across different age groups, and whether that amount is truly enough to retire comfortably. We’ll also look at how long it might last and what the broader retirement savings picture looks like across the U.S. If you’re planning for your future, this insight can help you set realistic goals and feel more confident about the path you’re on.
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The Rarity of $5 Million Retirements
Percentage of retirees with $5 million
Retiring with $5 million dollars is an exceptionally rare achievement. According to data from the Employee Benefit Research Institute, based on the Federal Reserve’s Survey of Consumer Finances, a mere 0.1% of retirees have managed to accumulate over $5 million in their retirement accounts. This statistic underscores the exclusivity of such high-value retirements.
Comparison to $1 million retirements
While $5 million retirements are scarce, even $1 million retirements are relatively uncommon. Only 3.2% of retirees have amassed over $1 million in savings. This comparison highlights the significant gap between average retirement savings and these high-value benchmarks. The median retirement savings account balance stands at a modest $87,000, according to the Federal Reserve’s Survey of Consumer Finances.
Factors contributing to high-value retirements
Interestingly, those who achieve $5 million retirements often did not anticipate reaching such financial heights. Key factors contributing to these high-value retirements include consistent savings efforts from early in their careers and maintaining modest lifestyles. Many of these successful retirees continue to work part-time and make thoughtful spending choices, demonstrating that disciplined financial habits play a crucial role in accumulating substantial retirement savings.
Average Retirement Savings in America
Retirement savings in America show a wide gap between preparedness and concern. According to a 2024 AARP survey, 20% of Americans aged 50 and older have no retirement savings at all. More than half of respondents also expressed concern that their savings won’t be enough to sustain them through retirement. These numbers point to a clear need for improved financial literacy and more proactive retirement planning.
Average vs. Typical Retirement Savings
When it comes to retirement savings, the numbers tell two very different stories. For those in their 60s, the median 401(k) balance is $210,724, while the average balance is $573,624. The large gap between the median and mean reflects how a relatively small number of high earners with large balances inflate the average, giving a misleading impression of how much most people actually have saved.
Mean & median retirement account balances by age group
Retirement savings tend to increase with age due to factors such as higher earnings, compound interest, and longer saving periods. Here’s a breakdown of mean and median 401(k) retirement account balances by age group:
| Age | Average 401(k) Balance | Median 401(k) |
| 20s | $91,133 | $34,225 |
| 30s | $181,500 | $73,763 |
| 40s | $370,879 | $154,212 |
| 50s | $592,285 | $252,850 |
| 60s | $573,624 | $210,724 |
| 70s | $431,962 | $106,654 |
| 80s | $393,826 | $86,301 |
Other assets contributing to retirement wealth
Retirement accounts are not the only source of wealth for retirees. Overall net worth, which includes assets like home equity and personal savings, also plays a crucial role. For instance, the median household net worth for ages 55-64 is $364,270, while for ages 65-74, it reaches $410,000.
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Conclusion
Retiring with $5 million is a rare achievement, with only 0.1% of retirees reaching this financial milestone. This data sheds light on the wide gap between typical retirement savings and high-value benchmarks. The stark difference between average and median retirement savings highlights the uneven distribution of wealth among retirees, emphasizing the need to consider various factors when planning for retirement.
While $5 million may feel out of reach for most, it’s not the only path to a secure retirement. With consistent saving habits, thoughtful investing, and a balanced lifestyle, many people can build enough to support their goals. Ultimately, retirement success isn’t just about the size of your portfolio, it’s about creating a plan that allows you to enjoy the life you’ve worked hard for.
FAQs
Data from the Employee Benefit Research Institute, which utilizes the Federal Reserve’s Survey of Consumer Finances, indicates that only about 0.1% of retirees have over $5 million saved for retirement. Additionally, about 3.2% have savings exceeding $1 million.
Based on information from the Federal Reserve’s Survey of Consumer Finances, around 10% of American retirees have successfully saved $1 million or more.
As per the 2022 Survey of Consumer Finances, the average retirement savings amount across all families is $333,940. However, the median retirement savings, which provides a more typical sense of average, is $87,000.
According to the 4% rule, a retirement portfolio of $1.5 million is expected to last for at least 30 years, providing an annual income of about $60,000 before taxes. The longevity of the funds can vary depending on how much is withdrawn annually and the returns on the remaining investments.
