A new survey of financial investors revealed that retirees need somewhere between $3 million and $5 million in savings to retire comfortably.
Key Details
- A survey of 553 investors worldwide found that a satisfactory retirement savings goal is anywhere from $3 million to $5 million, according to an MLIV Pulse survey.
- Most of those surveyed are optimistic about reaching their retirement goals this year. Last year, retirement accounts were down as inflation and higher borrowing costs brought down stock returns.
- Both professional and retail investors expect stocks to resume their traditional behavior this year.
- Even with a somewhat more optimistic outlook, respondents aren’t confident they will have sufficient savings to maintain their current lifestyle after retirement. Rising inflation has increased the amount investors need to save.
Why it’s news
Investors are always making estimates about how much they will need to tuck away for retirement—calculating how much they will need per year and how much their savings can generate for them. These new numbers of $3 million to $5 million are historically higher than past surveys have revealed.
However, rising inflation could severely affect retirement savings, particularly for those near or just entering retirement. The possibility of a recession and reduced corporate profits over the last year make the dangers of a shrinking nest egg even more apparent, Bloomberg reports.
For many investors, retirement savings are tied up in index and equity funds that tend toward greater investment in the index’s top stocks. Tech stocks like Apple, Microsoft, Amazon, Alphabet, and Meta received greater investment during the bull run as the tech companies grew and expanded rapidly. However, now many investors are heavily involved with tech companies as they begin to lose revenue and attempt to cut costs.
Experts expect new leaders in the stock market to appear in the next three to five years, Bloomberg reports. Non-U.S. assets are also likely to grow, particularly those in Asia. In MLIV’s survey, the highest number of respondents chose Asia as the most likely place outside the U.S. to have favorable returns.
Despite a changing economic outlook, most of the investors surveyed are sticking with their current investment plans. About 56% of respondents have no intention of changing their plans, and around 8% said they might never retire.
