In my last piece, I noted that just over 3% of Americans have saved up at least $1 million for retirement. Undoubtedly, the handsome seven-figure sum, which can power retirement in an affordable city, is what many savers and 401k contributors aspire to hit before they’re comfortable hitting the retirement button. However, with individual healthcare costs in retirement now expected to exceed $172,500, even a million dollars requires careful planning.
As always, there’s no magic savings number that works for everyone. Ultimately, the perfect retirement fund figure comes down to how your expenses stack up to the potential passive income (think pensions, investment income, and gig income). For lavish spenders who live in Manhattan, it could take more than $5 million to finance a sustained retirement. For those living in rural Nebraska, however, that magic number is probably closer to $1 million.
Of course, it’s always tempting to raise the bar after you’ve hit your retirement milestone, especially if your employer tempts you to stick around with “super catch-up” contributions. Under recent legislation, savers aged 60 to 63 can now contribute up to $11,250 in catch-up funds, bringing their total annual deferral limit to a record $35,750 for the 2026 tax year.
In any case, this piece will look into the retirement overachievers with at least $5 million stashed away. As always, contact a financial advisor so they can help you find a ballpark figure and a realistic retirement date.
How many Americans have managed to save a handsome $5 million?
According to the Employee Benefit Research Institute, a mere 0.1% of Americans have a retirement nest egg worth $5 million or more. While the average 401(k) balance has climbed to roughly $340,364 in 2026, the $5 million mark remains a rare milestone. Interestingly, female continuous savers are closing the gap, with long-term average balances now exceeding $508,000. Even if the bull market continues, it is unlikely the 0.1% figure will expand significantly in the near term.
In any case, if you’re a high-income earner committed to living in a pricey city in comfort, you may need to join that $5 million club. Of course, you may not need that much if you embrace the growing trend of “phased retirement,” where savers transition into part-time consulting or passion projects rather than stopping work entirely.
Learn how to temper emotions during the market’s inevitable ups and downs.
You don’t need to be a seasoned trader to unlock the power of compounding, but you do need a modern perspective on portfolio construction. With two in five Americans now viewing the traditional 60/40 stock-and-bond split as outdated, many are looking toward alternative assets or aggressive growth via the Nasdaq 100 to reach their goals.
These days, the stock market is running hot, and the risk of a painful plunge is real. Whether the road gets bumpier from here remains to be seen, but having the ability to stay skeptical during bull runs and optimistic during bear markets is key to long-term success. The most significant danger in aiming for $5 million lies in taking on excessive risk; consulting an advisor is critical to ensure you don’t set your retirement back by decades.
The bottom line
For many, saving $5 million is out of the cards and may even be unnecessary. With 70% of Americans now planning to retire on their own terms—often through flexible work—the $5 million target is shifting from a requirement for survival to a fund for total vocational freedom.
An advisor can help you determine if this is a realistic target or suggest ways to optimize your current path. Save, contribute, and utilize new automatic enrollment features to grow your wealth. While $5 million is a high bar for those who don’t care for luxuries, setting smaller milestones based on the 2026 contribution limits is a great way to start.
Editor’s Note: This article has been updated with 2026 financial data, including the new $35,750 total contribution limit for savers aged 60 to 63 and updated 401(k) balance benchmarks. The revision also incorporates new statistics regarding female savings trends and the shift toward phased retirement models.
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