- A Northwestern Mutual survey found that Americans believe they need $1.46 million to retire comfortably.
- Although many Gen Xers are less than 20 years away from retirement, that amount has risen to $1.56 million.
- But research shows they only have an average of $108,600 in savings, and they could outlive their savings.
Most Americans need a lot of money to retire comfortably, but many of them are far behind.
a New Northwestern Mutual Survey A survey of 4,588 adults conducted by Harris Poll from January 3 to January 17 reveals how much Americans believe they should enjoy life after working. And the price will only continue to rise.
According to the survey, Americans aim for $1.46 million as the magic number for a comfortable retirement.
And it varies by generation. Both Gen Z and Millennials say they can retire comfortably with $1.6 million or more, while Gen Expectations for wealthy individuals with incomes above $1 million were much higher, at $3.93 million.
But these are all hundreds of thousands, if not millions, off from the amount each cohort actually saved. For example, Gen Xers save an average of just $108,600 for retirement.it is few than that generation Average annual number of households Pre-tax income for 2022 is $126,892.
There is a huge gap in retirement goals for Gen Xers. According to the survey, 42% of them believe they can “outlive their savings.”
Gen Xers also expect to retire later than other generations. On average, Americans expect to retire at age 65, Gen Z expects to retire at age 60, while Gen X expects to retire at age 67.
How much money do you need before you retire?
It’s difficult to pinpoint the exact numbers that will allow generations of Americans to retire comfortably, but the Wall Street Journal notes that: pointed Fidelity Investments’ methodology suggests that you should aim to save the equivalent of six times your annual income at age 50, and save 10 times your annual income by age 67. And as the Wall Street Journal points out, low-income Americans overestimate how much they’ll need to retire.
For example, for comprehensive calculations, the average annual household income for Gen X is $126,892. Per BLS. Using Fidelity’s formula, for Gen X to be on track to save enough by age 67, he would need to have more than $761,000 saved by age 50. This is much more than what they currently save on average, but it is also much lower than their estimates for 2015. Northwestern Mutual Investigation.
The high retirement goals cited by survey respondents may reflect the difficult state of the U.S. economy. Although the pace of inflation has slowed since the pandemic, it remains above the Federal Reserve’s target level of 2%, and many Americans are struggling to pay for necessities, especially housing, food, insurance, and utilities. They continue to suffer from high costs weighing down their wallets.
For example, a majority of Gen Z, Millennial, and Gen There is.
Gen Xers also face severe economic hardship as the “forgotten generation.” Both Millennials and Gen Z started saving for retirement earlier than Gen X and are confident in preparing financially for retirement. Meanwhile, a July survey of more than 1,800 Americans by YouGov and Business Insider found that Gen Xers overall feel more financially secure than other generations.
And all of this retirement anxiety and meager savings comes as retirement savings are becoming increasingly out of reach for many Americans. The threat of retirement is already a reality for some seniors, with just over half of Americans 65 and older earning less than $30,000 a year, relying on Social Security to survive and having no choice but to continue working. It’s gone.
The situation is likely to get worse as Social Security benefits remain in jeopardy and student loan debt and other financial pressures only increase.
Are you worried about not being able to retire? How are you preparing for retirement? Contact information for these reporters is as follows: jkaplan@businessinsider.com and asheffey@businessinsider.com.