You Need More Than Your "Retirement Number" to Be Retirement-Ready

Ask most people saving for retirement what they're aiming for, and they'll probably give you a big, round number. $1 million. $1.5 million. $2 million. Chances are it’s a figure they’ve absorbed from either a financial media interview or an online calculator at some point. (And look, we do it too.)

But if you ask that saver what the number actually gets them once they retire, their poise starts to evaporate.

That’s in part because they have to account for a lot of moving parts (inflation, market fluctuations, and so on). But it’s also in part because that “retirement number” isn’t all that useful. At least, not in a bubble.

Survey: Americans Are Not Prepared for Retirement

Those moving parts I just mentioned are weighing mightily on current retirees’ confidence about retirement. Just consider this batch of dour findings from Schroders’ 2026 US Retirement Survey:

• 49% of retirees say their expenses in retirement are higher than expected
• 58% do not know how long their savings will last
• 90% are concerned about inflation reducing the value of their assets
• 87% are concerned about higher-than-expected healthcare costs
• 81% are concerned a major market downturn could significantly reduce their assets
• 64% wish they had done more planning before retirement
• Only 32% currently work with a financial advisor

The numbers are bleak, but Deb Boyden, Head of U.S. Defined Contribution at Schroders, says what really stands out is the emotional toll they’re taking.

She notes that the survey data shows 36% of respondents worry that financial stress will affect their health, 28% have lost sleep thinking about money, and 27% spend an hour or more a day worrying about their financial situation. That’s a meaningful chunk of retirees' waking hours spent in a state most people associate with their working years—not the version of retirement sold in commercials.

That should very well have people currently saving for their own retirement asking: “What can I do to avoid the same fate?”

WealthUpdate Tip: Knowing how much you can contribute to your different retirement accounts each year is pivotal for optimizing your savings.

The Retirement Preparedness Picture

This week, we talked to Schroders’ Boyden about some of the factors derailing retirees’ confidence, why many current retirees weren’t fully prepared before leaving the workforce, and what we can do to be better informed and ready when it’s our time to retire.

Understanding What the Retirement Number Really Means

The two most important facets of the retirement number is getting to it, and knowing what to do with it.

Boyden says that the broader defined-contribution industry—plan providers, sponsors, and others involved in accounts like 401(k)s and 403(b)s—has excelled at addressing the former, but has some catching up to do on the latter.

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"The industry has done a really good job over the past many years in helping individuals with savings," she said, pointing to automated tools like target-date funds, auto-enrollment, and auto-escalation that have created a genuine “set it and forget it” environment that’s conducive to more disciplined saving.

But where the industry has fallen short is helping people understand what comes after hitting that number.

“OK, you’ve got this lump sum. How does that translate into a monthly income?” Boyden says. “And then, how do I translate that into my net income, minus my expenses? How do I account for that?”

It’s helpful to think about retirement planning as twofold:

1. Planning toward retirement (how to accumulate the money you need)
2. Planning for once you’re in retirement (how you’ll decumulate the money once you have it)

How do you address the latter? Well, you’ll want to start exploring “decumulation” questions such as:

• What kind of withdrawal strategy will I follow?
  • What will my monthly income be?
  • How long can I expect my money to last?
• What will my retirement budget look like?
• Will I move once I retire?
• Have I considered hidden retirement costs?

Boyden says that the industry is increasingly putting solutions and tools in place to help retirement savers better understand the decumulation aspect, but providers need to spend more time and resources on it.

WealthUpdate Tip: Another important component to your retirement calculus is Social Security—specifically, how much of it you can expect to collect.

Why Gen X Is Especially Unprepared

A Schroders survey from the previous year shows that Generation X (ages 45 to 60 at the time) is staring down a particularly stark retirement shortfall.

Just 16% of Gen Xers believe they’ve saved enough money. They expect to have $711,771 saved, but believe they’ll need a little more than $1.1 million to have a comfortable retirement—all of which comes out to a $404,976 savings gap that’s larger than any other generation surveyed.

“What we've seen with Gen X is they kind of missed the boat,” Boyden says. “They worked during a period where they missed the pension—the Baby Boomers before them likely had a pension they would rely on for secure retirement income. But they also missed the later days of auto-enrollment and target-date default.

“So they didn’t get the benefits of automation, nor the benefits of defined-benefit and pension plans.”

Among the best tools at Gen X’s disposal are catch-up contributions and, eventually, “super” catch-up contributions.

The overarching 401(k) contribution limit for 2026 is $24,500. However, once you reach a certain age, you can put even more money away in your work account:

• If you’re between the ages of 50 and 59, or you’re 64 or older, you can contribute an additional $8,000, for a total of $32,500.
• If you’re between the ages of 60 and 63, you’re allowed to make “super” catch-up contributions of up to $11,250 more, for a total of $35,750.

If you make enough to contribute more during these years without straining your finances, you should.

Related: 9 Best Vanguard Retirement Funds [Save More in 2026]

Areas Where Retirement Planners Fall Short

The study’s findings also help us get an idea of where retirement planners find significant gaps between expectations and reality.

For instance, one of the greatest disconnects revolves around healthcare. As mentioned above, a vast majority (87%) of respondents said they were worried about higher-than-expected healthcare costs. One of the biggest reasons for that was expectations over Medicare. Specifically, a majority (58%) said they expected Medicare to cover a greater share of their costs.

“Individuals are either overlooking the costs of healthcare because they think it's going to be covered by Medicare [and other programs], or they're underestimating what they're going to have to contribute to that,” Boyden says.

People also seem to underestimate or simply overlook the potential for a poorly timed market downturn to rattle their retirement plans.

“I think the lack of awareness around a significant market downturn (and therefore the impact that has on one's savings) close to or at retirement makes a major difference,” she says. “You might not have enough time to recoup that downturn and turn those losses back into gains. 

“I think that’s something that’s really underestimated when thinking about savings and ensuring that yes, you might have enough today, but what if there’s a downturn or an unfortunate health crisis?”

Connected to that is portfolio construction—not just what you own when you’re saving, but what you own once you’re starting to use that nest egg.

“We talk so much about diversification during accumulation, but diversification in decumulation, in retirement, is just as important,” Boyden says. “While some people want to protect their savings from a market downturn, there are likely individuals who still need to grow those assets. So considering products that protect on the downside, but are still growing your assets, is really important. 

“Typically these types of solutions are diversified. If there’s a downturn with equities, then, hopefully you also have an allocation to fixed income that protects you. And it could go beyond just equities and fixed income. Asset allocation is critical.”

Young and the Invested Tip: Another area in which many retirement savers fall short? Understanding their tax obligations once they’re tapping into their 401(k)s and other accounts.

How to Be Better Prepared

In addition to asking yourself the questions we asked above, people increasingly do have resources at their disposal for making a better plan around how to use their retirement number.

“The plan sponsors are realizing that this is an area that they should help their participants in, and that is probably the best resource for individuals—tools and educational resources around financial wellness, either from the recordkeepers or a third-party provider,” Boyden says.

And as we’ll often mention, one of the best ways to ensure you’re prepared for retirement is to talk to people who specialize in … well, preparing people for retirement. Financial advisors can not only help you optimize your portfolio and improve your chances of reaching your retirement number—they can help construct a plan that considers all of the expenses you should expect to tackle, devise a withdrawal strategy that can match your income to your bills, and adjust your plan as theory becomes reality.

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