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Americans raise retirement savings target to $1.46 million as financial worries grow

The ‘magic number’ has risen by $200,000 since last year

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Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.

Updated:

key insights:

  • Americans now believe they need an average of $1.46 million to retire comfortably, up $200,000 from last year, according to Northwestern Mutual.
  • Nearly half of Americans worry they could outlive their retirement savings, while many Gen Xers and Millennials expect to keep working after retirement.
  • Financial experts say there is no universal retirement savings target, but early planning and consistent saving remain the best ways to close the gap.

Americans’ estimate of how much money they need to retire comfortably has climbed sharply over the past year, reflecting growing concerns about inflation, longer life expectancies, and uncertainty surrounding Social Security.

According to Northwestern Mutual’s latest Planning & Progress Study, the average American now believes they will need $1.46 million to retire comfortably. That’s an increase of $200,000, or more than 15%, from last year’s estimate of $1.26 million. 

The increase comes as many workers question whether they’ll be financially prepared to stop working. Among people who have not yet retired, 46% said they do not expect to be financially ready when the time comes, while 48% believe it is somewhat or very likely they could outlive their retirement savings. 

The concerns appear to be reshaping retirement plans.

Growing ‘magic number’

Half of millennials and half of Generation X respondents said they expect to continue working during retirement, either because they need additional income or because they want to remain active and engaged. Overall, 41% of Americans said they expect to work during at least part of their retirement years. 

Despite the growing “magic number,” Northwestern Mutual cautions that no single savings goal fits everyone. Retirement needs depend on factors such as lifestyle, healthcare costs, longevity, and other sources of income, including Social Security and pensions.

The survey found that Americans’ biggest retirement questions center on how much they’ll need to save, whether Social Security benefits will still be available, whether they’ll outlive their savings, and how to prepare for healthcare and long-term care expenses. 

The study also found a significant difference between people who work with financial advisors and those who do not. Respondents with advisors were substantially more likely to say they understand how inflation, taxes, healthcare costs, and market downturns could affect their retirement and that they have incorporated those risks into a financial plan.

Wealthier retirees have more ambitious goals

For higher-net-worth Americans — those with more than $1 million in investable assets — the expected retirement nest egg is even larger. On average, they estimate needing about $2.67 million to retire comfortably. 

The survey also found generational differences in saving habits. Gen Z respondents reported beginning retirement savings at an average age of 22, roughly a decade earlier than Gen X, potentially giving younger workers a longer runway for compound investment growth. 

While the $1.46 million figure may seem daunting, financial planners emphasize that the most important step is developing a long-term savings strategy and starting as early as possible. Even modest, consistent contributions over decades can significantly improve retirement readiness, while delaying savings often requires much larger monthly contributions later in life.