Study Finds Massive Gap Between How Much Americans Think They Need to Retire and How Much They've Actually Saved

Chris Malone Méndez
·2 min read
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With the looming possibility of Social Security running dry in the next decade and the elimination of pension plans, more and more Americans are worried about how—if at all—they'll be able to retire. A new study is illuminating just how wide the gulf is between how much people have saved and how much they believe they will need to retire comfortably.

Financial services company Northwestern Mutual just released its annual Planning and Progress Study for 2024 that breaks down views on retirement and savings across generations and states. This year is major for the retirement world as more than four million Americans will turn 65—a trend that will continue through 2027 as part of the largest surge of Americans hitting retirement age in history.

On average, U.S. adults believe they will need $1.46 million to retire comfortably, marking a 15 percent jump from the $1.27 million that Northwestern Mutual reported last year. It's been a steep climb over the past five years as people's "magic number" has jumped 53 percent from the $951,000 average goal reported in 2020.

At the same time, Americans across generations average about $88,400 currently in savings, which continues widening the gap between current savings and retirement goals that has been growing throughout the decade.

Related: Average Americans Feel They Need $230,000 Salary to Be Comfortable

In particular, boomers and Gen Xers are in the most immediate danger of not meeting their retirement goals. The 2024 study found that 49 percent of boomers and 48 percent of Gen X believe they'll be financially ready to stop working when they reach retirement age.

“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," Aditi Javeri Gokhale, Northwestern Mutual's chief strategy officer, said in a statement. "Inflation is expanding our expectations for retirement savings and is putting the pressure on the ability to plan and stay disciplined."

So if you're behind on your target number or date, you can at least take comfort in the fact that you're nowhere near alone.