New ‘Magic Number’ for Retirement Drops to $1.26 Million
Retirement planning is a topic that weighs heavily on the minds of many Americans. A recent survey by Northwestern Mutual revealed that the average “magic number” for retirement has decreased over the past year, easing some fears about spiraling retirement costs. Last year, the estimated amount needed for retirement was $1.46 million, but this year, it has dropped to $1.26 million. While this decrease is a positive shift, it is still a significant sum that many people have not saved up.
John Roberts, Chief Field Officer at Northwestern Mutual, noted that although the magic number has come down, it still remains high. Many Americans worry that they will run out of money in retirement, despite the decrease in the estimated amount needed. The survey, which polled over 4,600 people in January, also highlighted that Gen X individuals, born between 1965 and 1980, are particularly behind in their retirement savings. Fifty-two percent of Gen Xers have saved 3 times their current annual income or less, and 54% believe they will not be financially prepared for retirement.
It’s not just Northwestern Mutual’s survey that sheds light on retirement savings. A study by Charles Schwab found that the average amount people think they’ll need for retirement is $1.8 million. These findings indicate a widespread concern among Americans about their financial readiness for retirement.
As inflation cools and retirement costs stabilize, it’s essential for individuals to assess their savings and investment strategies to ensure they are on track to meet their retirement goals. Building a financially secure retirement requires careful planning, budgeting, and potentially seeking the advice of financial professionals to make informed decisions.
For more insights on retirement planning and financial security, check out the latest articles on Money’s platform. Stay informed about Social Security updates, cost of living adjustments, and strategies to build a solid financial foundation for your retirement years.
