The magic retirement figure that American adults believe they need to save to retire comfortably has jumped to an all-time high of $1.46 million, according to a new survey. This is more than $500,000 higher than the magic number goal of $951,000 reported five years ago.
Northwestern Mutual on Tuesday released a 2024 plan that includes some key findings about how Americans are thinking about retirement and how that compares to how much they've saved. and announced a survey on progress.
The study found that ideal retirement savings grew by 15% from 2023 to 2024, outpacing inflation and widening the gap between goals and progress.
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The average amount American adults currently have saved for retirement is $88,400, $10,000 less than the 2021 average. The difference between current retirement goals and average savings is $1.37 million.
“Anxiety about retirement is very high,” Teresa Ghilarducci, an economist at the New School for Social Research, told The Wall Street Journal. Ghilarducci cited her medical and long-term care costs as potential financial stressors.
The magic number for retirement varies by generation. Gen Z believes he needs $1.63 million to retire comfortably, while Millennials and Gen X aim for $1.65 million and $1.56 million, respectively.
The report said boomers need to have less than $1 million ($990,000) saved by retirement.
High-net-worth individuals with investable assets of $1 million or more have a retirement goal of approximately $3.93 million. This group also saved more for retirement than anyone else, saving an average of $172,100, but they have the largest gap between their lofty retirement goals and their current savings.
Related: 'Young people are losing trust in older generations': BlackRock CEO Larry Fink blames baby boomers for retirement crisis
The study also pointed out that Gen Z began saving at the average age of 22, 15 years earlier than baby boomers, and Millennials and Gen Xers started saving at ages 27 and 31, respectively. faster than
Gen Z also wants to retire earlier than older generations, at age 60 rather than age 65 or older. Compared to the answers of older generations, they believed that he would probably live to be 100 years old.
BlackRock CEO Larry Fink told investors in his annual letter last month that politicians and business leaders should come together to tackle the retirement crisis.
“As a society, we devote a great deal of energy to helping people live longer lives,” he wrote. “But not a fraction of that effort goes into helping people pay for those extra years.”
According to a 2023 survey by the Employee Benefit Research Institute (EBRI), only 35% of people who retired early said they did so because they could afford it.
Related: Retirement crisis is upon us — compare your savings with those of your peers