: The magic number for retirement climbs as most Americans expect to work longer — except Gen Z

Americans think they’ll need $1.27 million to retire comfortably, but they plan to work longer to amass that nest egg.

The new magic number for retirement is up slightly from last year, when U.S. adults said they believed they needed $1.25 million to retire comfortably, according to new findings from Northwestern Mutual. High-net-worth individuals – those with more than $1 million in investible assets – believe they’ll need $3 million to retire comfortably.

There’s quite a gap, however, between what people have now and what they think they’ll need. The average amount that U.S. adults have saved for retirement is only $89,300, up 3% from $86,869 in 2022, Northwestern Mutual found.

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

“The good news is that they are saving and investing more for tomorrow, even in this time of high inflation and market volatility. That is a step in the right direction and a reverse of what we saw last year when the gap widened rather than narrowed. The challenging news is that there continues to be a big disparity between what they think they’ll need to retire and what they’ve saved to date,” Javeri Gokhale said.

Among generations, Gen Z (those born between 1997 and 2012) is the most confident they’ll be financially prepared for retirement when the time comes. Older generations are more pessimistic. More than half of Generation X (those born between 1965 and 1980) say they won’t be ready, and nearly half of millennials (those born between 1981 and 1996) and boomers+ (not yet retired) say the same. (Boomers are those born between 1946 and 1964.)

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

Overall, Americans on average plan to work until the age of 65, up from 64 last year and 62.6 in 2021. Interestingly, Gen Z is aiming to retire earlier at age 60 even as many are expecting to live to age 100, Northwestern Mutual said.

Boomers+ plan to work the longest (71) while Gen Z expects to retire more than a decade earlier (60). Millennials and Gen Xers plan to work to age 63 and 65, respectively.

The study found that people who identify as disciplined financial planners knock two years off their retirement age (63). Informal or non-planners add two years (67).

The study explored what Americans are most looking forward to about retirement, as well as their greatest concerns. People are most looking forward to relaxing (55%), getting family time (51%) and traveling (48%). Those activities beat out volunteering (17%), a second career (13%), and doing something entrepreneurial (11%). 

People are most concerned about declining health (44%), outliving savings (43%) and boredom. What people won’t miss? Work. Very few people said they were concerned about missing their career (16%). 

“What stood out to us in these findings is that concerns about outliving savings came in virtually equal to declining health,” said Javeri Gokhale. 

On average, Americans say there is a 45% chance they outlive their savings and yet one third (33%) haven’t taken any steps to address it. For people who work with an adviser, the story is different – nine of out 10 (89%) have taken steps to address the possibility of outliving their savings.

The study found three in 10 (28%) Americans think it’s likely they’ll live to a 100. But expectations are much greater among younger adults, with 40% of Gen Z and millennials expecting to hit triple digits.

Interestingly, more men (31%) than women (26%) think they’re likely to live to 100 when in fact mortality data suggests the opposite is true. Among centenarians in the U.S. today, 85% are women.

“Gen Z seeks to retire at age 60, and many of them believe they will live to age 100,” Javeri Gokhale said. “I think those are bold and fantastic goals – which means that they will have to be intentional about planning to live four decades of worry-free life in retirement.”

Interestingly, more than four in 10 Americans (42%) said they could imagine a time when Social Security no longer exists, according to the research. And yet, people are relying on Social Security to provide 28% of their overall retirement funding. That’s more than personal savings (22%) and equal to retirement savings (28%).

Gen Z and millennials have tempered expectations – they anticipate Social Security will provide 15% and 19% of their overall retirement funding, respectively. That’s a significant drop from what boomers+ say – 38%.


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