Experts say the average American needs nearly $1.5 million to retire in 2024. It’s a value many will find unattainable, and it’s steadily on the rise. Just how unaffordable is it? Adults need 16 times more than what they currently have in savings to make it happen.
Northwestern Mutual recently released its 2024 Planning and Progress Study, which surveyed 4,588 U.S. adults back in January. According to the findings, Americans believe they need $1.46 million to retire comfortably right now. That “magic number” is $1.37 million shy of what those surveyed reported in actual savings, an average $88,400. That’s more than $10,000 less in savings than the five-year peak in 2021 ($98,800).
“In 2023, the soaring cost of eggs in the grocery store symbolized inflation in America. In 2024, it’s nest eggs,” Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual, said in a news release.
“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,” Gokhale continued. “Inflation is expanding our expectations for retirement savings, and putting the pressure on to plan and stay disciplined.”
Since the pandemic first began, the retirement “magic number” has ballooned by more than 50%. It jumped by 15% in the past year alone. Meanwhile, the amount of money Americans have actually been able to save has dropped by 10.5% over the past three years.
It’s a stark statistic that’s riding in the wake of the “silver tsunami” — a massive surge of Americans turning 65. According to the Northwestern Mutual, study 11,000 people in the U.S. will turn 65 every single day through 2027.
Fewer than half those closest to retirement, the boomer and Gen X generations, say they believe they will be financially prepared to retire.
