Advisors know that retirement “magic numbers” are to be taken on a client-by-client basis, but in recent years, the aggregate numbers, or the dollar amounts clients and retirees believe they’ll need upon exiting the workforce until they pass on have been creeping beyond $1 million.
The recently published Schroders 2026 US Retirement Survey, which polled 1,500 U.S. investors in the 30 to 79 years old cohort, boils it down in monthly terms: $5,094 is what respondents believe they need to generate monthly to enjoy “comfortable” retirements.
In essence of keeping the math simple, let’s call that $61,000 per year. Putting that figure into context, it’s roughly two-thirds of the U.S. median income of $80,000 yearly. Add to that, there are three states where $61,000 outpaces the median income.
Put succinctly, $5,100 monthly in retirement isn’t an excessively lofty goal, but that expectation is high enough to imply that retirees who aren’t working with advisors are basically “winging it.” As for the pre- and current retirees who want that much or more in retirement income who are also working with advisors, it’s best to keep the lines of communication with your advisor to ensure you’re on the right track.
On the Road to $61,000
Everyone’s situation is different, but let’s be honest. Private sector access to defined benefit pensions has dwindled in recent decades, meaning retiring at 55 or somewhere around there isn’t feasible or advisable for many workers. The lack of defined benefit pensions also enhances the importance of Social Security for many workers, but many also preparing to commit claiming age errors.
“52% of non-retired Americans are ‘concerned’ or ‘very concerned’ about outliving their assets in retirement,” according to Schroders. “ Despite these concerns, 45% are planning to file for Social Security benefits before reaching age 67 – the full retirement age for everyone born in 1960 or later, and just 10% plan to wait until age 70, when an individual reaches their maximum monthly benefit.”
Advisors need to tell clients, particularly those wanting to claim Social Security at 62, that by claiming at 62, they’ll have to endure a 30% haircut to their monthly checks. Put it this way, the average Social Security check is $2,510 and that’s for folks claiming at 67 years old. That’s almost halfway to the $5,100 monthly goal.
Shave 30% off $2,510 and the result is $1,757, or a third of the desired $5,100 in monthly income. That means in order to come with the extra $3,400 per month, retirees’ investments need to be doing a lot of heavy lifting.
Need for Advisors Is Strong
Something else early Social Security claimants need to be mindful is that by volunteering to receive benefits at 62, they may well be putting themselves in a position where they have to take larger-than-expected withdrawals from retirement accounts.
It’s not a stretch to say that will be the case for many retirees who aren’t working with advisors because as the Schroders study notes, 51% of respondents retirees don’t have solid strategies in place. Said another way, advisors are needed now more than ever.
“Our survey findings reveal a blind spot that many don't discover until it's too late. Planning for retirement isn't just about how much you save - it's about knowing how you'll turn that savings into a reliable income stream,”said Deb Boyden, Head of US Defined Contribution, Schroders. “Far too many people retire without a clear strategy for making their money last, and that uncertainty can be just as stressful as not having saved enough in the first place.”
