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Retirement anxiety is surging — half of Americans can't accurately guess how far their savings will go

Christy Bieber
Sep 14, 2026
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In a perfect world, retirement would be something people look forward to. In the real world, it’s something people worry about.

A study from the National Institute on Retirement Security (NIRS) found that 80% believe the country faces a retirement crisis, while 61% are concerned about their own ability to achieve financial security in retirement.

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Unfortunately, many future retirees are lacking one crucial piece of knowledge that would help them make an informed retirement plan. They don’t know how to estimate how far their savings will go in retirement.

Retire on your terms — we'll show you how.

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Americans are unsure of their retirement income

When making retirement plans, there’s one key fact that matters the most: How much can you withdraw from your retirement accounts without running the risk of your account balance falling too fast? And, unfortunately, around half of Americans get this calculation very wrong.

In fact, 50% of NIRS survey respondents were overly optimistic when asked how much $100,000 in savings would produce — in some cases, wildly so. Close to one in five Americans (19%) believe they can withdraw $25,000 or more per year from a $100,000 retirement investment balance.

In reality, if you follow the 4% rule, the actual number is $4,000 in income in year one, an amount only 9% guessed correctly.

This lack of knowledge, unfortunately, puts many Americans at significant risk. “The obvious risk of not calculating how far your money will go is running out of money in retirement. Without planning, your finances and lifestyle are at risk,” Steve Azoury, ChFC® and owner of Azoury Financial, told Moneywise.

Caleb Moyer, a CFP® and owner of Moyer Financials, also stressed the importance of setting a safe withdrawal rate early, telling Moneywise, “The first several years are especially important because this is usually the first time in someone’s life that they are consistently taking money out of their investments instead of putting money in.”

Moyer also warned about the impact of the sequence-of-return risk, stating, “If the market falls early in retirement and they are forced to sell investments to fund living expenses, those shares are permanently removed from the recovery that may follow.”

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How to estimate the amount of income you’ll need in retirement

For young Americans decades away from retirement, it may not feel like a big deal to be in the dark about how much income their savings will produce in the decades ahead. But this is actually something you need to know early.

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“You can’t wait until retirement. You need to make estimates throughout your career to plan for the most exciting time of your life — where you can do what you want to do instead of what you have to do,” Azoury said.

If you understand how much income your investments can safely produce, it gives you a clearer picture of how much you actually need to invest. And, fortunately, there’s a simple way to calculate that.

“What are your real annual expenses? How much will be covered by guaranteed income, like Social Security and a pension? The gap between the two – guaranteed income and expenses – is the money that has to come from your savings,” Xintian Wang, CPA and senior tax manager at Alexander Accountants, CPAs, told Moneywise.

“Following a common rule, you should be able to pull about 4% of your portfolio a year with reasonable safety. So if the gap between your income and expenses is $40,000 a year, that means you need roughly a million behind it,” Wang said. Typically, this means you will start by withdrawing 4% in your first year of retirement, then adjust the amount up each year for inflation.

If you follow the 4% rule, you can easily determine how much you need invested by multiplying that number by 25. So, for example, if you decide you need $60,000 instead of $40,000, you’d multiply $60,000 by 25 to find you need $1.5 million invested.

While the 4% rule isn’t a perfect measure, it’s a good starting point to give you an idea of how much savings you need. You don’t want to make the mistake that 50% of Americans are making and anticipate that you can spend much more than you safely can. It’s better to know the truth now to set realistic goals about your future, so do this calculation today. Don’t wait.

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Christy Bieber Freelance Writer

Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.

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