For decades, the financial services industry has pitched $1 million as the magic number for retirement. Reach that milestone, the thinking goes, and you're set for life. But here's the uncomfortable truth: that finish line isn't just difficult to reach—it's completely unrealistic for the vast majority of Americans.

According to the Federal Reserve's Survey of Consumer Finances, only 4.7% of Americans have managed to save at least $1 million in retirement-specific accounts like 401(k)s and IRAs. The numbers get even thinner from there. Just 1.8% have $2 million saved, and a mere 0.8% have reached $3 million or more.

So what does everyone else actually have saved? Let's look at the real numbers.

The Reality of Retirement Savings

When you break down retirement account balances by age group, the picture becomes clearer—and for many, more sobering. Here's what the Federal Reserve data shows:

Age 65 to 74

• Average retirement savings: $609,230
• Median retirement savings: $200,000

Age 75 and over

• Average retirement savings: $462,410
• Median retirement savings: $130,000

The gap between the average and median tells you everything you need to know. While the averages might look reasonable, the median reveals what most people are dealing with. Half of all retirees 75 and older have less than $130,000 saved. That's not a lot when you're facing rising healthcare costs, persistent inflation, and decades of living expenses ahead.

Financial advisors like Fidelity recommend having about 10 times your pre-retirement income saved by age 67 to maintain your standard of living. For someone who earned $60,000 a year, that means $600,000 saved—a figure that's already beyond reach for most Americans based on the median numbers above.

This isn't just about individual choices or willpower. A 2024 report from the Center for Retirement Research at Boston College found that roughly 39% of working households approaching retirement age are projected to fall short of maintaining their pre-retirement lifestyle. That's systemic, not personal failure.

What About Total Net Worth?

Retirement account balances don't tell the whole story. Many older Americans have built wealth through home equity, savings accounts, investments, and business interests. When you look at total household net worth—which includes all assets minus debts—the numbers look more encouraging.

Age 65 to 75

• Average net worth: $1.78 million

Age 75 and over

• Average net worth: $1.62 million

So technically, many retirees are millionaires on paper. The catch? Much of that wealth is locked up in illiquid assets, primarily their homes. You can't exactly pay your electric bill or cover prescription costs with equity in your house—at least not without some strategic planning.

Making It Work With Less

If your retirement savings are below the averages—or even if they're right on track but still feel inadequate—there are practical moves you can make to generate income and extend your resources.

Delay Social Security

This is one of the simplest and most effective strategies available. For every year you wait to claim Social Security beyond your full retirement age (up to age 70), your monthly benefit increases by roughly 8%. That's a guaranteed return you won't find anywhere else.

Use Home Equity Wisely

Downsizing to a smaller home, selling a second property, or opening a home equity line of credit can unlock cash without forcing you to liquidate investments. Even modest homes that have appreciated over the years can provide meaningful financial flexibility.

Try Fractional Real Estate Investing

Some retirees are exploring fractional ownership in rental properties, which allows them to buy small shares in income-producing real estate without the headaches of property management. These platforms offer passive income potential with less risk than owning an entire property outright.

Consider Flexible Work

Many retirees return to work—not because they have to, but because it keeps them engaged and provides extra income. Remote consulting, seasonal gigs, or turning a hobby into a small side business can offer low-pressure ways to supplement retirement savings.

Rethinking the Finish Line

The truth is that most retirees will never hit $1 million in retirement savings. And honestly? That's perfectly fine.

What matters more than any arbitrary number is understanding your full financial picture—your net worth, your fixed expenses, your income sources, and the assets you can tap into when needed. It's about building flexible income streams and using what you have, whether that's home equity or simply more time, to support the life you want to live.

Retirement isn't a finish line you either cross or miss. It's an ongoing process of making smart, adaptable decisions that fit your circumstances. And the best part? You can adjust your strategy as you go.