How much money is enough when you retire? $3 million, says survey

How much money will you need to be comfortable when you retire is one of the trickiest financial problems. The latest Bloomberg news survey says at least $3 million is needed for a secure retirement. When asked how much is enough to be comfortable when you retire, Bloomberg's MLIV Pulse survey of 553 investors globally showed about a third bet on $3 million and roughly another third pencilled in $5 million.

Most respondents are confident that by the end of 2023, their retirement savings will be higher than in 2022, and investors were also convinced they would get closer to their retirement objective. But the respondents were not sure if they would have enough money saved to support their current standard of living after retiring from work.

Less than half of the investors gave that a 100 per cent chance.

The lack of conviction on the standard of living is mostly driven by a surge in inflation since the war on the edge of Europe a year ago. According to Vanguard Group, the average American retirement account was down 20 per cent last year, largely driven by higher borrowing rates, inflation, and a downturn in the prices of stocks and bonds.

A large portion of retirement savings is invested in actively managed equity funds. Blue chip stocks make up for a majority of such funds, especially for senior savers and index funds.

With the hammering global stocks, surging inflation and rising interest rates, the value of those retirement savings has taken a beating. The global economic outlook and, in turn, the expectations for returns on assets also remain bleak this year.

Still, despite the uncertain economic future and recent losses in their accounts, 56 per cent of investors in the survey said they are not changing their retirement plans. About 8 per cent of respondents indicated they would never retire.

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