A recent financial study shows that the amount of money U.S. adults think they’ll need in retirement is increasing.
Northwestern Mutual’s 2023 Planning & Progress Study, which is based on answers from 2,740 U.S. adults surveyed between February 13 and March 2, 2023, indicates that people firmly believe that they need to be a millionaire to make it in retirement.
How Much Money Do You Think You Need for Retirement?
Respondents to Northwestern Mutual say they need an average of $1.27 million to retire comfortably, according to the study. That’s up from $1.25 million on last year’s report.
Despite believing they need $1.27 million to retire, U.S. adults have saved an average of $89,300, which is a 3% increase from 2022.
Here’s a look at how much American adults believe they need for retirement and how much they have currently saved.
| Ages | Amount Expected To Need for Retirement | Amount Currently Saved for Retirement |
|---|---|---|
| 70s | $936,000 | $113,900 |
| 60s | $968,000 | $112,500 |
| 50s | $1.56 Million | $110,900 |
| 40s | $1.28 Million | $77,400 |
| 30s | $1.44 Million | $67,400 |
| 20s | $1.20 Million | $35,800 |
| All | $1.27 Million | $89,300 |
The study, which was done by The Harris Poll on behalf of Northwestern Mutual, also examined Americans’ behavior and expectations toward money including retirement savings and projected financial needs during retirement.
How To Find Out the Amount of Money You Need for Retirement
To find out how much money you need for retirement, you can use online retirement calculators. These give you a dollar estimate based on the information you add to a form.
Some online retirement calculators include:
While it’s wise not to trust online retirement calculators fully, money expert Clark Howard says the income estimates they produce can give you an idea of what your financial goals should be.
“I’d say if you try three or four of these, you’ll have enough information to have a real sense of where you need to go with your money by blending the results they have,” Clark says.
How To Boost Your Retirement Right Now
- Get out of debt: If you’re in debt, Clark wants you to eliminate debt in three years or less.
- Take on a side job: Our Work from Home Guide is a great place to find vetted job opportunities to add to your income.
- Start an emergency fund: Insulate your finances by putting aside money for emergency situations. That way, when something happens you won’t have to dip into your savings to cover it.
“You and I are the ones who have to save money outside of what we expect from Social Security in order to be able to live with some level of comfort and security,” Clark notes.
Final Thoughts
No matter what you think you need for retirement, if at all possible, Clark wants you to build up your finances by working past age 62, which is when you can qualify for Social Security benefits.
“Every year that you wait, you get an additional 8% in your check,” he says. “And once you start taking it, every increase is based on the base that you started at. So you end up with a lot more money to live on later in life if you wait to take Social Security.
Want more money-generating tips? Read Clark’s guide on how to start saving for retirement.
