NEW YORK–The amount of savings Americans believe is needed to retire comfortably has jumped by more than 50% in just four years.
A new survey from Northwestern Mutual has found the typical worker believes they need $1.46 million to retire comfortably — a jump of 53% from their savings target in 2020, the survey found.
“But most people are far from reaching that objective, with the study finding that the average amount held in a retirement account today is just $88,400,” noted CBS MoneyWatch in its analysis of the new data. “That means that the typical worker has a $1.37 million gap between their actual savings and their retirement aspirations.”
Living Longer May Play Role
In 2020, Americans said a comfortable retirement required approximately $951,000,
Aditi Javeri Gokhale, chief strategy officer at Northwestern Mutual, told CBS MoneyWatch. Many workers are also expecting to live longer and spend more time in retirement, which may also explain why people believe they need bigger nest eggs than in prior years.
“Indeed, Gen Z workers, who are currently in their early 20s, want to retire at 60, and almost one in three think they'll live to 100, meaning that they'll need to fund a 40-year retirement, the study found,” the report noted.
Where Did Number Come From?
How did Americans arrive at that $1.46 million figure?
Gokhale noted most have not met with a financial advisor and are guesstimating the amount they need.
"There is no major calculation; it's a feeling," Gokhale noted. "Some of them probably have done some math, in terms of saving and in terms of average burn to operate [in retirement], but it generally comes [down] to feeling."
CBS MoneyWatch said that using the rule of thumb to withdraw 4% of one's retirement savings annually, a nest egg of $1.46 million would result in about $58,400 in annual income.
Daily News Headlines. To Your Inbox. Every Day. And It’s Free
The biggest, best and freshest news reporting in credit unions remains free, and now has an added bonus---free shipping to your email address! That’s right. Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance.