April 02, 2024

By Northwestern Mutual

Milwaukee WI (Highpoint Digest) – On average, Americans have less than $89,000 saved for retirement. They think they’ll need $1.46 million. The 2024 Northwestern Mutual Planning & Progress study finds a widening gap between what people have and what they think they will need.

“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,” says Aditi Javeri Gokhale, chief strategy officer, head of institutional investments and president of retail investments at Northwestern Mutual.

“Inflation is expanding our expectations for retirement savings and is putting the pressure on the ability to plan and stay disciplined.”

While the average of what people think they’ll need across America is $1.46 million, a look at the average retirement savings by age shows many people think they’ll need even more.

Average Retirement Savings by Age

How much do I need to save to get to $1.46 million?

The figure $1.46 million might seem like a big number—because it is. But it’s an attainable number. The key to getting there is saving consistently over time. The younger you start, the better—thanks to the power of compound interest.

Infographic showing how much you need to save starting at different ages to get to $1.46 million in retirement savings

Want more? Get financial tips, tools, and more with our monthly newsletter.

First name^*Last name^*Email^*Sign me up

How much do I need in retirement savings?

So how do you stack up with the average? Perhaps a little ahead—or maybe a bit behind? The reality is that it doesn’t really matter. That’s because the amount you need to save is unique to you. Your need will be based on what your retirement might cost. Here are three questions to ask yourself.

What do you want to do in retirement?Are you planning to travel the world in style or stay close to home and babysit the grandkids? These are two very different visions with different price tags. Give this one some thought. And if you have a spouse or partner, have this conversation together.
When do you plan to retire?Are you the type of person who can’t wait to leave work behind? Or do you love your job and could see yourself working forever? Retiring earlier is great, but it also means you’ll have a longer time to live off your savings.
How long will you live?No one knows the answer to this question. But the reality is that if you’re in poor health and don’t expect to live as long, you may not need as much in savings as someone who is in great health. But it’s always a good idea to plan for the risk that you will live longer than you expect.

How to get the most from your retirement savings

Just saving consistently for retirement is great.

But a little strategy around how and where you save can help you make your money work harder. That’s because using a range of financial options can help you grow your wealth while also protecting you from common risks like taxes, market volatility, inflation, and even the risk that you will live longer than expected.