Inflation has crept into every part of Americans’ lives, including how much they now think they need to retire comfortably: a record $1.46 million, a study released on Tuesday said.
That’s a 53% surge since the $951,000 target Americans reported in 2020 and a 15% increase from last year’s $1.27 million, according to Northwestern Mutual’s 2024 Planning & Progress Study which polled 4,588 adults in January.
The jump hasn’t spurred Americans to save more, though. The average amount that U.S. adults have saved for retirement dropped modestly to $88,400 from $89,300 in 2023 but that is more than $10,000 off the five-year peak of $98,800 in 2021, the study said. The dip in savings brings the gap between what people think they need for retirement and what they’ve saved to $1.37 million.
“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,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual. “Inflation is expanding our expectations for retirement savings.”
What we think we need in retirement and what we’ve saved
Every generation shows a large gap between what its members believe they’ll need for a comfortable retirement and the reality of what they have saved as of today, the study showed.
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