Less Than One Third Expect to Reach Seven Figures

Certainty of Cash Contributing to Savings Gap

To retire comfortably, Americans currently participating in a workplace retirement plan (e.g. 401k, 403b, or 457 plan) say they will need $1.28 million saved, according to the Schroders 2025 US Retirement Survey. Despite this seven-figure savings target, one-in-four plan participants (26%) expect to have less than $250,000 saved by retirement, nearly half (48%) say they will have less than $500,000, and just 30% believe they will reach the $1 million milestone before retiring.

Faced with this sizable savings shortfall, 81% of plan participants are at least slightly concerned with outliving their assets in retirement.

Among those participating in a workplace retirement plan, 69% report the plan is their single most important retirement asset. Despite this significance, only 20% say they use their plan’s auto-escalation feature, which automatically increases their contribution percentage at set intervals. Notably, 19% say they have decreased the percentage of their income that they contribute to the plan, with 61% of them doing so in the past two years. Further, 17% of plan participants report they have borrowed money from their plan.

The most frequently cited reasons for taking loans from a workplace retirement plan were to:

• Pay for unforeseen family or personal emergencies (29%)
• Bring down credit card or other debt (25%)
• Keep up with the increasing cost of living (22%)
• Purchase a home (15%)
• Pay for medical care (14%)

“It’s difficult to focus on saving for retirement amid a seemingly endless supply of competing financial goals and obligations,” said Deb Boyden, Head of US Defined Contribution at Schroders. “However, saving enough money for a comfortable retirement doesn’t happen by chance. If you don’t stay on track with saving in your workplace retirement plan, it’s unlikely you’ll be able to retire on your own terms.”

Comfort of Cash Comes With An Opportunity Cost

While nearly one-third of plan participants (31%) admit they don’t know how their retirement assets are allocated, among those that do know, allocations across all retirement investments (including workplace plans, IRAs, or other retirement accounts) suggest that loss aversion may be shaping their decision-making. Following is a breakdown of how their retirement investments are allocated:

When asked about the reasons for allocating retirement savings to cash, the certainty of the asset class is the most frequently cited explanation:

• Safety – I am afraid of losing too much money if the stock market goes down (53%)
• To diversify my investments (47%)
• Because I’m not sure how best to invest my cash holdings (23%)

“For most plan participants, saving for retirement is the quintessential long-term goal,” said Boyden. “If you’re five or more years away from retiring, a modest amount of cash could help you take advantage of tactical investment opportunities, but holding one-quarter of your portfolio in cash comes with a steep opportunity cost. Shifting these savings into investments that are designed to deliver better returns than cash while minimizing market downturns can help you accumulate wealth more efficiently and narrow any savings gaps.”

Plan Participants Concerned About Impact of Financial Stress

Most plan participants (65%) say they worry about money too much and over half (56%) are concerned that financial stress will negatively affect their health. On average, 53% of participants spend at least an hour a day worrying about money.

Notably, 59% wish they received more guidance from their employer on how to invest their retirement plan assets.

About the Survey

The Schroders 2025 US Retirement Survey was conducted by 8 Acre Perspective among 1,500 US investors nationwide ages 29-79, including 602 currently participating in a workplace retirement plan, from March 25 to April 17 in 2025.

For more information visit the Schroders 2025 U.S. Retirement Survey

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Schroders plc

Schroders is a global investment manager which provides active asset management, wealth management and investment solutions, with £778.7 billion (€941.8 billion; $975.3 billion) of assets under management at 31 December 2024. As a UK listed FTSE100 company, Schroders has a market capitalisation of circa £6 billion and over 6,000 employees across 38 locations. Established in 1804, Schroders remains true to its roots as a family-founded business. The Schroder family continues to be a significant shareholder, holding approximately 44% of the issued share capital.

Schroders' success can be attributed to its diversified business model, spanning different asset classes, client types and geographies. The company offers innovative products and solutions through four core business divisions: Public Markets, Solutions, Wealth Management, and Schroders Capital, which focuses on private markets, including private equity, renewable infrastructure investing, private debt & credit alternatives, and real estate.

Schroders aims to provide excellent investment performance to clients through active management. This means directing capital towards resilient businesses with sustainable business models, consistently with the investment goals of its clients. Schroders serves a diverse client base that includes pension schemes, insurance companies, sovereign wealth funds, endowments, foundations, high net worth individuals, family offices, as well as end clients through partnerships with distributors, financial advisers, and online platforms.

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