Did You Know Cost of a Comfortable Retirement Is Rising?

Americans believe they will need $1.27 million to retire comfortably, according to the latest set of findings from Northwestern Mutual’s 2023 Planning & Progress Study. That is up from $1.25 million reported last year. At the same time the average amount actually saved for retirement increased a modest 3% in 2022 to just under $87,000.

“Americans’ magic number for retirement readiness continues to rise,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual, in a media release announcing the study.

Among age groups, people in their 50s expect to need the most for a comfortable retirement – more than $1.5 million. The numbers drop considerably for people in their 60s and 70s, largely because many of them are already in retirement.

Among generations, Gen Z is the most confident they’ll be financially prepared for retirement when the time comes, with 65% saying they expect to be ready. Older generations are more pessimistic – more than half of Gen X say they won’t be ready, and nearly half of Millennials and Boomers+ (not yet retired) say the same.

Overall, Americans on average plan to work until the age of 65, up from 64 last year and 62.6 in 2021.

SOURCE: Northwestern Mutual 2023 Planning & Progress Study