Do you need $1.5 million to retire comfortably?

And more on that "magic number"
͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ 
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April 9, 2024
Retire with Money

How much money does it take to bankroll a comfortable retirement? If you ask Americans, the average answer is an astounding $1.46 million. 

That’s per a recent Northwestern Mutual survey of 4,500 U.S. adults, which found retirement cost expectations have spiked since 2020. This year’s average estimate is 53% higher than it was four years ago, when people said they’d need $951,000 to retire. 

When it comes to their actual savings, though, Americans are far from achieving their expected retirement needs: Survey respondents reported their average retirement savings is just $88,400 in 2024.

That’s a $10,000 decrease from the average retirement savings recorded by Northwestern Mutual in 2021, when the metric hit its five-year peak of $98,800. 

“People’s ‘magic number’ to retire comfortably has exploded to an all-time high, and the gap between their goals and progress has never been wider,” Aditi Javeri Gokhale, Northwestern Mutual's chief strategy officer, president of retail investments and head of institutional investments, said in a news release.

It’s likely that people are giving more thought to how variables like inflation will affect their financial needs in retirement, given that prices on everything from food to housing have exploded over the last few years. And they’re probably wise to do so: Americans between 60 and 65 say they’re now spending an average of 53% of their income on everyday essentials, according to a December study from Nationwide Mutual’s retirement research division.

At the same time, the decline in workers’ retirement nest eggs shows how economic factors like inflation may be hurting their ability to save. Given how much the average savings reported in Northwestern Mutual’s survey has fallen in the last four years, it’s no wonder that more than half of U.S. adults say they won’t be able to achieve a secure retirement.

You can find out more about Northwestern Mutual’s findings by reading my story. If you have any burning questions or want to share your retirement experience, drop me a line at mcags@money.com.

— Mary Ellen Cagnassola, Money reporter

Mary Ellen Cagnassola

P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue.

Stat of the Week: 42%
Piggy bank with groceries

Speaking of inflation’s impact on retirement: A March study from Allianz Life found that 42% of Americans have withdrawn from their retirement savings early due to rising prices. Latino (59%), Asian (51%) and Black (50%) respondents were more likely than their white peers (39%) to say they’ve made a withdrawal because of inflation. 

Money Move of the Week
Boost your retirement and diversify your portfolio with a Gold IRA
Gold

Diversify your retirement portfolio with a Gold IRA to help shield your wealth from market shifts, economic uncertainty, and inflation. With gold’s value expected to rise in 2024, it’s a good time to invest. Planning for retirement is more than saving; fortify your portfolio with gold today for a better tomorrow.

See our list of Best Gold IRA Companies to kickstart your path to a better retirement.

Gold

 

Retirement 1, 2, 3
Dinner at home
  • 🏡 As Gen Xers (roughly defined at those born between 1965 and 1980) approach retirement, they’re seeking out homes where they can grow old, the New York Times reports. 
  • 📣 Union leaders respond to Blackrock CEO Larry Fink’s recent musings about retirement security in a recent Fortune commentary, calling for more funding and a better structure for the U.S. retirement safety net.  
  • 🤔 Is 75 the new 65? A BBC story explores how increasing life expectancies globally are forcing many workers to delay retirement. 

More Insights and Advice from Money
retirement
As millions of Americans struggle to put away enough money for retirement, economists, lawmakers and workers alike are advocating for the revival of a retirement-planning relic.
Money; Getty Images

retirement
Social Security payments for April will start making their way to some beneficiaries this week.
Olive Burd / Money; Getty Images

retirement
Many Americans dream of the day that they’ll hang up their briefcases and enter life's third act, but a recent study suggests that retirement isn't joyful for everyone.
Money

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