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Americans Hit New High in Retirement Savings ‘Magic Number’


According to a new study by Northwestern Mutual, the “magic number” that Americans believe they need to retire comfortably is surging to an all-time high.

Northwestern Mutual’s 2024 Planning & Progress Study found that U.S. adults now believe they will need $1.46 million for retirement, marking a 15% increase over the $1.27 million reported last year.

Over a five-year span, Americans’ “magic number” has jumped a whopping 53% from the $951,000 target reported in 2020, the financial service organization noted.

The 2024 Planning & Progress Study, which involved more than 4,500 U.S. adults surveyed in January, explores Americans’ attitudes, behaviors, and perspectives regarding long-term financial security.

According to Northwestern Mutual, when looking across different generations, both Gen Z and Millennials expect to need more than the national average to retire comfortably.

Gen Z estimated $1.63 million, while Millennials think they’ll need $1.65 million to retire comfortably. Gen X, or those born between 1965 and 1980, estimated needing $1.56 million, and Boomers – generally born between 1946 to 1964 – believe they’ll need $990,000.

High-net-worth individuals, or people with more than $1 million in investable assets, said they’ll need nearly $4 million to retire comfortably, according to the study.

The study also found that the average amount that American adults have saved for retirement dropped modestly from $89,300 in 2023 to $88,400 in 2024.

That’s a $1.37 million gap between the average current savings and the average retirement goal.

This study comes amid a record number of Americans dipping into their 401(k) accounts for financial emergencies amid ongoing high inflation. Hardship withdrawal activity from 401(k) accounts increased in 2023, going from 2.8% of people in 2022 who initiated a hardship withdrawal to 3.6% of participants last year, according to the Vanguard Group, which tracks about 5 million accounts.

Aditi Javeri Gokhale, chief strategy officer, president of retail investments, and head of institutional investments at Northwestern Mutual, said inflation has expanded “our expectations for retirement savings.”

The average age U.S. adults begin saving for retirement is 31, according to Northwestern Mutual’s study. However, there were big differences on this subject across generations.

Gen Z, or those born between 1997 and 2012, begin saving for retirement at age 22, on average – nearly a decade earlier. Boomers in the study said they started when they were 37, while Millennials and Gen X’ers began saving for retirement at ages 27 and 31, respectively, according to Northwestern Mutual.

By saving sooner, Gen Z also hopes to retire earlier, according to the study.

“They expect to retire at the age of 60, a dozen years before Boomers+ who say they’ll work until they’re 72,” the company said. “Millennials and Gen X’ers expect to work until 64 and 67, respectively. The average age most people expect to work to is 65.”

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