While U.S. workers aged 45 and older believe it takes, on average, $1.1 million in savings to retire comfortably, just 21 per cent expect to reach this goal, down from 24 per cent in 2022, according to a new survey by Schroders.

The survey, which polled more than 2,000 employees, found more than half (59 per cent) said they expect to have less than $500,000 saved for retirement, including 34 per cent who said they expect to save less than $250,000. The percentage of near-retirees who said they haven’t saved enough money increased to 24 per cent, up from 22 per cent in 2022.

Millennial workers said they believe it takes an average of $1.3 million to retire comfortably, but only 29 per cent said they expect to reach $1 million in retirement savings. Roughly half (49 per cent) said they expect to save less than $500,000, including 27 per cent who said they expect to save less than $250,000.

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Among respondents with a workplace retirement savings plan, half of older workers (50 per cent) and millennials (48 per cent) said the performance of their plan in 2022 caused them anxiety. More than half (59 per cent) of millennials said they didn’t change their asset allocation last year, while 26 per cent said they became more conservative and 15 per cent said they invested more aggressively.

Among older workers, 65 per cent left their allocations unchanged, while a quarter (25 per cent) became more conservative and 10 per cent took a more aggressive approach.

“There are profound gaps between what American workers say they need for a comfortable retirement and what they expect to have,” said Deb Boyden, head of U.S. defined contribution plans at Schroders, in a press release. “This could be from a lack of planning or, for many, it might just be too hard to save and invest enough to reach their retirement goals. The fact that, once again, so few Americans nearing retirement are confident they have enough money speaks volumes about the work we still need to do.”

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