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Key Takeaways
- New research from Northwestern Mutual released Monday shows that Americans think the "magic number" of money they need to retire is $1.26 million saved.
- Around a quarter (25%) of Americans with retirement savings have only saved one year of their current income or less for retirement.
- Fidelity Investments recommends saving 10 times your salary by the age of 67 as a general rule, since retirement costs are affected by so many variables.
When you think about retiring, you need to consider how much money is needed to retire comfortably. A new survey shows what Americans believe the answer is.
Northwestern Mutual’s new research shows that Americans believe $1.26m is the magic number for retirement. Majority of people don’t believe they will be financially prepared for retirement. This year's number is $200,000 less than the $1.46 million reported last year and about flat with estimates from 2022 and 2023.
Around a quarter (25%) of Americans who are saving for retirement have just a year or less of current income. Northwestern Mutual reports that more than half of Americans believe it is likely they will outlive their retirement savings.
With retirement depending on so many factors—how much your annual salary and living expenses are, what your assets add up to, when you’ll retire and inflation—it can be tricky to plan and save for the unknown. Fidelity Investments says that you should save 10 times your salary by the age 67. The numbers vary depending on whether you plan to retire sooner or later, but the financial service company recommends saving one-time your annual salary by the age of 30.
Northwestern Mutual’s data indicates that the majority of Gen Xers (currently between 45-60 years of age) do not have enough money to cover their current income. They also report that they will have to continue working into retirement in order for them to receive additional income.
Americans are saving more, planning to retire early, and expecting to be around longer than previous generations. Gen Z is more financially prepared than Gen X or millennials, with 60% of Gen Z believing they will be financially ready to retire.
