As retirement approaches, many ask themselves how much money they will need to save for a comfortable retirement. One common benchmark is $4 million, which is considered by some as the amount needed for a worry-free retirement. However, achieving this amount is rare. According to the Federal Reserve Board, only a small fraction of retirees have amassed that much wealth. This highlights the wide disparity in retirement savings between different groups of Americans.

A financial advisor can help you evaluate different strategies to build a nest egg for your retirement.

How Many Retirees Actually Have $4 Million Saved?

The number of retirees with $4 million or more in savings is relatively small. Using data from the Federal Reserve’s Survey of Consumer Finances (SCF), the Employee Benefits Research Institute estimates that only 4.7% have $1 million or more saved for retirement. The percentage for those with $2 million or more saved drops down by almost two-thirds to 1.8%. And those with $5 million or more only account for 0.2%.

Few Americans who reach the $4 million mark in retirement savings accumulate multi-million-dollar portfolios through savings and investment returns alone. Instead, these high-net-worth individuals have multiple income sources that could include stock market investments, real estate holdings, or business ownership.

What Is the Average Amount People Save for Retirement?

The average retirement savings vary significantly based on age, income and financial habits, but most Americans fall short of recommended savings targets. The Federal Reserve’s SCF shows the median retirement savings for U.S. households is around $87,000, while the average, skewed by higher wealthier individuals, is approximately $334,000.

Breaking it down by age, Fidelity Investments reported in March 2025 that average 401(k) balances ranged from as low as $7,300 to more than $250,000.

Source: Fidelity

For many, these amounts are far below the recommended savings needed for a comfortable retirement. Fidelity suggests having 10 times your annual salary saved by age 67, meaning someone earning $100,000 per year should aim for $1 million or more.

To help close the gap on this retirement savings goal, most retirees rely on multiple income sources, including Social Security, pensions and investments.

How to Build Your Retirement Nest Egg

While $4 million is an impressive retirement goal, you should keep in mind that only a small percentage of retirees actually reach this goal. Most Americans rely on Social Security, pensions and personal savings to pay for retirement. Here are four general ways to build your nest egg:

• Start early and contribute regularly: The earlier you start saving for retirement, the more time your money has to grow. By contributing regularly, even small amounts can accumulate significantly over time due to the power of compound interest. Establishing a consistent saving habit can make a substantial difference in your retirement fund. For example, if you started at age 30 and invested $3,000 per month at an average annual return of 7%, you would approach the $4 million mark by your late 60s.
• Maximize employer contributions: As your earnings increase, so should your contributions. So take full advantage of any employer-sponsored retirement plans, such as a 401(k), especially if your employer offers matching contributions. This is essentially free money to boost your retirement savings. Make sure that you contribute enough to get the full match because missing out is like leaving money on the table.
• Use tax-efficient investment strategies: Many people minimize the tax burden on their investments by putting money into tax-advantaged accounts like IRAs and 401(k)s. You can also consider other tax-efficient investments like municipal bonds and certain ETFs or mutual funds. Additionally, strategies like tax-loss harvesting can help preserve more of your returns.
• Diversify your investments: Diversification is key to managing risk in your retirement portfolio. By diversifying your investments across different asset classes like stocks, bonds and real estate, you can protect your savings from market volatility.
• Delay your Social Security benefits. Another way to help close the gap on a $4 million nest egg is to delay your retirement. Each year you delay claiming Social Security benefits, up until age 70, your benefits grow by about 8%. This increase can substantially boost your lifetime income, especially if you live well into your later years. And if you have a partner, coordinating this strategy with your spouse’s benefits could boost your household’s financial security even further.

Common Strategies to Make Your Nest Egg Last

Once you have successfully built the bulk of your nest egg, you will then need to shift your focus to preserve that savings. Here are four common strategies that could help your nest egg last a lifetime:

• Make strategic withdrawals: Planning your retirement withdrawals will preserve capital. Using a conservative withdrawal rate, like 3% or 4%, can help your nest egg last a lifetime. For example, withdrawing 4% annually from a $4 million nest egg would give you $160,000 per year, and reducing it to 3% would yield $120,000.
• Add income-generating investments: To supplement your withdrawal strategies, think about adding income-generating investments to your portfolio. Common ones include dividend-paying stocks, bonds, or real estate income trusts (REITs). These can provide a steady income stream that can be especially valuable during periods of market volatility or low interest rates.
• Review and adjust your plan regularly: Life circumstances and financial markets change, so it is important that you review your retirement plan periodically. Adjust your contributions and investment strategies as needed to stay on track with your retirement goals.
• Reduce unnecessary expenses: Cutting back on non-essential spending can free up more money for your retirement savings. Analyze your monthly expenses to identify areas where you can save. Redirecting these funds into your retirement account can have a significant impact over time.

Bottom Line

Planning for retirement typically involves savings early, maximizing employer contributions and diversifying investments, among other strategies. Very few Americans ever reach the goal of saving $4 million. Instead, they rely on a combination of strategies to amass retirement income, which often includes Social Security benefits, pensions and investments.

Tips for Retirement Planning

• A financial advisor can help you create and manage a retirement plan to reach different goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• If you want to diversify your retirement portfolio with other types of investments, here’s a roundup of 13 to consider.

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