In a prior piece, we noted that just over 3% of Americans have saved up at least $1 million for retirement. That seven-figure sum, enough to power retirement in an affordable city, is the milestone most savers and 401(k) contributors are chasing. Healthcare costs, however, are rising faster than many people anticipate. Fidelity’s 25th annual Retiree Health Care Cost Estimate, released July 21, 2026, puts the average lifetime medical tab for a 65-year-old retiring today at $185,500, a 7.5% jump from the prior year’s $172,500. The increase reflects higher medical prices, growing utilization of health services, and rising costs tied to chronic conditions. Even so, 54% of pre-retirees incorrectly expect Medicare to cover all of their healthcare expenses in retirement, according to Fidelity’s research, a misconception that makes careful planning all the more urgent for any saver approaching a seven-figure nest egg.
There is no universal magic savings number. The right figure depends entirely on how your expenses stack up against the passive income you can generate from pensions, investment portfolios, and part-time work. A lavish lifestyle in Manhattan could require well over $5 million to sustain a decades-long retirement, while a modest life in rural Nebraska could be funded comfortably with a fraction of that amount.
A $1,000,000 Income Portfolio
If you’ve saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
Legislation is also giving near-retirees fresh tools to close the gap. Under the SECURE 2.0 Act, savers who turn 60, 61, 62, or 63 during the calendar year can contribute up to $11,250 in super catch-up funds to their 401(k), pushing the total annual deferral limit to $35,750 for the 2026 tax year. That four-year window is narrow: once a participant turns 64, the enhanced limit reverts to the standard $8,000 catch-up. For workers in their early 60s who feel behind, this provision offers one of the most powerful final pushes available before retirement.
This piece looks at the retirement overachievers who have stashed away at least $5 million. As always, a financial advisor can help you find a realistic target and a credible timeline to reach it.
How many Americans have managed to save $5 million?
Data from the Employee Benefit Research Institute, drawing on the Federal Reserve’s Survey of Consumer Finances, indicates that only about 0.1% of Americans have over $5 million saved for retirement. To put that in perspective: in a room of 1,000 people, just one would cross that threshold. According to a 2024 AARP survey, 20% of Americans aged 50 and older have no retirement savings at all, which makes the $5 million club all the more rarefied.
The gap between typical savers and those at the very top is striking. Fidelity’s Q4 2025 Retirement Analysis shows the average 401(k) balance closed 2025 at $146,400, up more than 11% over the prior year and the third consecutive year of double-digit annual gains. The average 403(b) balance rose 13% to $133,500 over the same period, and the average IRA balance grew 7%, reaching $137,095. Long-term savers fare considerably better: participants who have contributed to a Fidelity retirement account with the same employer for at least five consecutive years held an average balance of $304,200, a 16% increase from the end of 2024. The number of Fidelity 401(k) participants holding a million-dollar balance hit a record 665,000 in Q4 2025, up from 654,000 in the prior quarter, a milestone that underscores how compounding and consistent contributions can move the needle over time.
Women are also narrowing the retirement savings gap at a notable pace. Women who participated continuously in their 401(k) for 15 or more years held an average balance of $508,700 at the end of 2025, having crossed the $500,000 threshold for the first time just the quarter before. Average 401(k) balances among women grew 22% over the past five years, outpacing the 20% gain for savers overall, and nearly four in ten women increased their savings rates during 2025. The backdrop is favorable as well: a record wave of baby boomers is now reaching traditional retirement age, a demographic trend some researchers call “peak 65,” bringing renewed urgency to these planning conversations. Even so, the $5 million mark remains a rare milestone.
For a high-income earner committed to a comfortable life in an expensive city, the $5 million club may well be the right target. And for those who find full retirement premature, the growing trend of phased retirement, where workers shift into part-time consulting or passion projects, can stretch a smaller nest egg further while keeping income flowing.
Keeping emotions in check through market cycles
Harnessing the power of compounding does not require a seasoned trader’s skill set, but it does demand a long-term perspective and discipline about portfolio construction. Many investors now view the traditional 60/40 stock-and-bond split as outdated, gravitating instead toward alternative assets or growth-oriented strategies to build the kind of wealth that reaches seven figures.
Market conditions shift, sometimes violently. The ability to stay skeptical during euphoric bull runs and steady during brutal downturns is one of the most undervalued skills in retirement planning. The greatest risk for anyone targeting $5 million is taking on too much risk in pursuit of it, which can set a retirement back by years or even a decade. A financial advisor can help calibrate the right level of exposure for your timeline and temperament.
The bottom line
For the majority of Americans, saving $5 million is neither achievable nor necessary. Many savers are redefining retirement itself, embracing flexible work arrangements and phased exits that reduce the total capital required. The $5 million target is less a survival threshold than a fund for total financial freedom, including the freedom to never work again on someone else’s terms.
A financial advisor can help you determine whether $5 million is a realistic goal or whether a smaller, well-constructed plan gets you to the same place. The core principles hold at any income level: contribute consistently, capture every available employer match, and take full advantage of contribution limit increases like the 2026 super catch-up for workers aged 60 to 63.
Editor’s note: This article was updated to add Fidelity research showing 54% of pre-retirees incorrectly expect Medicare to cover all retirement healthcare costs, the “peak 65” demographic context, the fact that women’s average 401(k) balances grew 22% over five years versus 20% for savers overall, and the Q4 2025 figure that the average 403(b) balance rose 13% to $133,500. The super catch-up window’s hard cutoff at age 64 was also clarified.
Learn 7 ways to generate income with a $1,000,000+ Portfolio
If you’ve saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
Contact editorial@247wallst.com for any questions or corrections.
