A new US survey finds plan participants need $1.2M to retire comfortably — but most expect to save less than half that amount
Plan participants say they need $1.2 million to retire comfortably. Most expect to save less than half that amount. That's the finding of Schroders’ 2026 US Retirement Survey, conducted among 1,500 US investors aged 30 to 79.
Half of respondents expect to retire with under $500,000 in total savings. Nearly one in four project they will reach retirement with less than $250,000 saved. Only three in ten believe they will cross the $1-million threshold before they retire.
The gap has clear implications for plan sponsors on both sides of the border, and debt is emerging as a primary driver.
The debt problem plan sponsors cannot ignore
Financial pressures eroding retirement readiness
Schroders 2026 US Retirement Survey
Source: Schroders 2026 US Retirement Survey, conducted by 8 Acre Perspective among 1,500 US investors aged 30–79, March 20–April 15, 2026.
Thirty-three per cent of plan participants reported that their credit card debt now exceeds their retirement savings. Competing financial pressures are actively eroding long-term readiness.
Fifty-five per cent said they are unable to save 10 per cent of their paycheque for retirement due to other expenses.
Sixty-nine per cent believe rising costs in healthcare, utilities, insurance, and housing have put retirement out of reach for their generation.
For Canadian plan sponsors, this pattern will be familiar. Research published by Benefits and Pensions Monitor has shown that financial stress is pushing employees to deprioritise retirement saving, with debt a leading factor.
“Rising costs are forcing tough tradeoffs, and saving for retirement is often the first thing that gets deprioritized,” said Deb Boyden, Head of US Defined Contribution at Schroders. “Plan sponsors who address these realities holistically, rather than focusing on retirement savings alone, are better positioned to move the needle on retirement readiness.”
Contribution cuts and plan loans on the rise
According to the survey, twenty-seven per cent of plan participants have decreased their contributions. Seventy per cent of those cuts occurred in the past two years. A further 27 per cent have borrowed from their workplace plan.
The most common reasons for taking a plan loan were paying down credit card or other debt (36 per cent), covering unforeseen emergencies (31 per cent), and keeping up with the cost of living (27 per cent).
These patterns point to a structural challenge for plan design. Defined contribution plan sponsors are increasingly being asked to address holistic financial well-being, not retirement readiness in isolation.
Why plan participants borrow from their workplace retirement plan
Schroders 2026 US Retirement Survey — respondents selected all that applied
Source: Schroders 2026 US Retirement Survey, conducted by 8 Acre Perspective among 1,500 US investors aged 30–79, March 20–April 15, 2026. Respondents selected all reasons that applied; figures do not sum to 100%.
Cash allocations signal misalignment with long-term goals
The survey also identified a significant asset allocation concern. Among participants who know how their retirement assets are invested, 26 per cent of savings are held in cash. That is nearly as much as the 27 per cent held in equities.
The top reason for holding cash was fear of market loss, cited by 53 per cent of respondents. Forty-four per cent said they were diversifying, and 33 per cent were waiting for a better entry point.
“For investors not planning to retire in the next five years, holding one-quarter of your savings in cash comes with a significant opportunity cost,” said Boyden.
This finding is relevant to Canadian defined contribution plan design conversations. Plan sponsors are exploring whether member defaults and investment menus are aligned with long-term retirement income goals, particularly following CAPSA guideline revisions.
Members want more guidance, and sponsors have a role to play
Eighty-one per cent of plan participants are at least slightly worried about running out of money in retirement.
Fifty-three per cent report spending at least an hour a day worrying about money. Fifty-nine per cent are concerned that financial stress will negatively affect their health.
Fifty-eight per cent said they wish their employer offered more guidance on how to invest their retirement plan assets.
That last figure is a direct prompt for plan sponsors. Emerging DC plan designs in Canada are evaluated on their ability to support members through accumulation and decumulation, not just contribution growth.
Boyden noted that the industry cannot look at retirement savings in isolation. “Credit card debt, rising costs, and emergency expenses are all part of the same equation,” she said.
