Ah… Retirement. That magical finish line where you’re supposed to trade in the Monday morning alarm clock for a cup of coffee on the back porch, maybe finally learning to play that one killer riff on guitar, or maybe just sleeping in without the guilt. We’ve all got that vision, right? Ya know the dream of what your retirement life will look like. Well, there may be a problem. For most Americans, that vision is colliding head-on with a pretty brutal financial reality.
So, you may remember that not too long ago people were aiming for one million dollars. If you could get $1MM you’d have enough to retire. Well, about that. See there is now a number that’s been making the rounds lately. That number is $2,089,000. That’s the average amount Americans say they’ll need to retire comfortably! Now this is according to a BlackRock survey of 1,000 registered voters conducted in January 2025. BlackRock CEO Larry Fink also shared that number in his 2025 annual chairman’s letter, and even he admitted it kinda caught him off guard. “That’s a lot. More than I was expecting,” he wrote.
But the real gut punch? Almost nobody is anywhere close to that number.
“That’s a lot. More than I was expecting,” – Larry Fink, BlackRock CEO
The Gap Between What We Think We Need and What We Actually Have
So, let’s just sit with this for a second. Americans now believe they need roughly $2.1 million to retire. And yet, according to that same BlackRock survey, 62% of respondents have saved less than $150,000! Oh man. That means the average person has stashed away only about 7% of what they think they’ll need. Only seven percent! That’s not a gap. That’s a f’n canyon.
It gets even more crazy when you start to look at Federal Reserve data. The median retirement account balance across all U.S. households sits at just $87,000. The average is more closer to $334,000, but I don’t think that should be used because that number gets pulled upward by the peeps who’ve already won the financial game. It doesn’t reflect where most of us actually stand.
And before you assume this is just a young people problem, it isn’t. Fink pointed directly at my generation, the Gen X, the oldest of whom are now in their late 50s and staring at retirement within the next decade. Even Gen X are falling short. This is the generation that was supposed to be, like, the proof of concept for the 401(k) era right? Well I guess the overall results may not be great.
So, Imagine someone sitting at a coffee shop, overhearing two people casually debate whether $2 million is “really enough” to retire on. That conversation sounds almost fracking nuts when you consider that half of U.S. households approaching retirement age have, like, zero dollars saved in either a 401(k) or an IRA. Not a little. Zero.
Social Security: The Safety Net With Holes in It
Some people’s retirement strategy, whether they’ll admit it or not, basically just boils down to, “I’ll just collect Social Security.” And look, I get it. It feels like something you’ve been paying into your whole working life, so it should be there when you need it. The problem is, that math is actually starting to fall apart!
The Social Security trust fund is projected to be depleted by around 2035. Our BlackRock CEO also flagged this directly in his letter. If Congress doesn’t step in with some kind of fix, retirees could be looking at benefit cuts in the range of 20% to 25%. The average Social Security benefit right now is around $2,000 per month. Chop that down by a quarter and you’re working with $1,500. In 2025 dollars. In a world where a decent rental in most mid-size cities runs twice that. Doh!
The point isn’t that Social Security will disappear entirely. Congress does have some strong things to prevent that from happening. But counting on it as your primary income source in retirement is like betting your whole set on the borrowed amp that might cut out at any moment. It’s not a plan. It’s a hope. Haha!
The much smarter move here is to treat Social Security as kinda like a bonus. Think of it as a supplement to other income sources rather than the main event. That means building up your own savings through traditional IRAs, Roth IRAs, or maxing contributions to your 401(k) while you still have runway to do it.
The 401(k) Maze Nobody Gave You a Map For
So in this letter Fink also pointed out something that doesn’t get nearly enough attention. Those people who have saved well don’t really know what to do with their 401(k) money once they stop working. Gen X is the first generation that has been primarily reliant on 401(k) plans for retirement, and the plans themselves never really came with an instruction manual for the withdrawal phase.
So the point here is that even retirees who’ve done everything right often spend too conservatively. They actually downsize their plans. They delay the things they wanted to do in retirement. They’re totally gripped by the fear of running out, so they live smaller than they have to! Nooooo!
One framework that can help is the 4% rule. The basic idea is that if you withdraw 4% of your total retirement savings in your first year of retirement and adjust for inflation each year after that, your money has a solid probability of lasting 30 years. It’s totally not a guarantee, and your situation may vary, but it gives you a starting point for understanding what a sustainable withdrawal actually looks like.
The other piece Fink raised is that 401(k) plans have historically been limited to stocks and bonds, while pension funds have long included private assets like real estate and infrastructure. He argues that access to those kinds of investments in 401(k) plans could meaningfully improve returns over time. BlackRock estimates that an extra 0.5% in annual returns, compounded over 40 years, results in 14.5% more money at retirement. That’s not chump change.
Why So Many People Arrive at Retirement Unprepared
So this letter also surfaced a stat that stopped me cold. According to a BlackRock survey, 33% of Americans have no retirement savings whatsoever! Nothing! And over 50% of them say they’re more afraid of outliving their savings than they are of dying. Let that one swim around with you.
The reasons people get to retirement somewhat underprepared are about as varied as the metal genres out thei lol. (Progressive Alien Deathcore anyone) Life happens Man! Medical bills. Job losses. Divorce. Kids. The housing market eating a all of income that previous generations were able to plow into savings. The system itself has changed dramatically. Pensions are basically gone. The responsibility for funding our own retirement has been handed, I think, entirely on us individuals, many of whom were never given the tools or education to handle it well.
This isn’t about failure or laziness. It’s about a structural shift that happened without much of a warning label on it.
But here’s the thing that Fink said that I keep coming back to: “Hard, but solvable.” He wasn’t being dismissive. He was acknowledging that the problem is real and serious while also making the point that it isn’t hopeless. And he’s right.
“…Hard, but solvable.” – Larry Fink, BlackRock CEO
What You Can Actually Do About It
So where does that leave you? Probably somewhere between mildly stressed and full fledged panic mode! I mean depending on where you are in your financial journey. Either way, the answer is basically the same, to start moving, even if the steps feel kinda small now.
Step 1:
Get honest about where you actually stand. Pull up your retirement accounts, add up all those balances, and run them through a retirement calculator. A lot of people avoid this because they’re afraid of what they’ll see. But you can’t fix a problem by pretending it doesn’t exist.
Step 2:
Start contributing and increase it over time. Even if you can only put away $50 or $100 a month right now, that money starts compounding immediately. If your employer offers any kind of 401(k) match, if you can, contribute at least enough to capture the full match. That’s TOTALLY FREE money, and leaving it on the table is one of the most expensive mistakes peeps can make.
Step 3:
Think beyond just your 401(k). If you have access to a Roth IRA, it’s worth considering, especially if you expect to be in a higher tax bracket later in life. The money grows tax-free and comes out tax-free in retirement.
Step 4:
Diversify your income sources for retirement. Social Security may be one, But think about retirement accounts, maybe some real estate income or dividend-paying investments. The more legs your retirement plan has, the more stable it is when one of them wobbles.
Final Step 5:
So, if you’re kinda overwhelmed or unsure where to start, talk to a fee-only financial advisor. Not someone trying to sell you products, but someone whose job is to give you objective advice. Think of it like hiring a guitar teacher. You could try to figure it all out with Tabs and YouTube, or you could get a coach to show you where your hands are actually supposed to go!
Start Where You Are
Retirement planning doesn’t have to feel like your staring down a $2 million mountain with nothing but the loose change you found on the floor of your car! The goal here isn’t perfection. The goal is progress. This isn’t meant to make you feel defeated. It’s meant to light a fire under your ass!
Sure, most Americans are behind. That’s just the truth. But “behind” isn’t the same as “out.” The people who actually build financial security aren’t the ones who had everything figured out from day one. They’re the ones who got honest about their situation, made a plan, and kept showing up even when it wasn’t glamorous.
Start today. Automate what you can. Ask questions. Learn the rules of the game. Because when you actually take control of your financial future instead of hoping it works out, you stop playing defense and start building something real.
Horns up, friends. It’s never too late to get your act together.
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