New survey data illuminates how America’s potential retirees are feeling about their fiscal future. The Schroeders 2024 U.S. Retirement Survey found that Americans currently participating in workplace retirement plans believe they need about $1.2 million to retire comfortably.
However, confidence isn’t high that they will reach this milestone. The survey found that only 29% of retirement planners believe they will hit the $1 million mark before retiring.
“The difference between how much money plan participants say they need to live comfortably and how much they expect to have saved is miles apart for most retirement savers,” noted Deb Boyden, head of U.S. defined contribution at Schroders.
“While the magic retirement savings number is over $1 million for many plan participants, they are not saving or investing correctly to reach this goal," she added. "Without better planning and a roadmap to close the savings gap, a comfortable retirement will be out of reach.”
Notably, the Schroders data finds that only roughly a quarter of survey participants invest in equities. As for why plan participants are hesitant to invest, 66% said they were concerned about losing too much money, should the stock market experience a downturn.
Protective Options
For investors worried about managing risk, a buffered outcome ETF can help. Buffered outcome ETFs can offer access to investment upsides while limiting some of the potential downside. One such example is the iShares Large Cap Deep Buffer ETF (IVVB ).
IVVB is actively managed and aims to provide similar returns as the iShares Core S&P 500 ETF (IVV ), up to a cap. This pairs with a downside buffer, protecting against roughly 5%-20% of potential losses across each calendar quarter.
In using a buffered strategy, investors can gain potentially more secure access to equities and other investment securities. While potential returns are subject to an upside cap, these funds can help investors potentially avoid market drawdowns.
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