No two people’s financial needs in retirement are exactly the same. But Americans, on average, seem united about something: They’ll need to save more to retire than they previously thought.
U.S. adults say they’ll need $1.46 million, on average, to retire comfortably, according to Northwestern Mutual’s 2026 Planning and Progress study. That’s a 15% jump from the $1.26 million they said they’d need in the report’s 2025 edition.
“The new ‘magic number’ reflects a convergence of factors — from persistent inflation and longer life expectancies to uncertainty about the future of Social Security,” John Roberts, chief field officer at Northwestern Mutual, said in a statement.
The data also reveals that many Americans fear their savings aren’t up to snuff. Among non-retirees, 46% say they don’t expect to be financially prepared to retire when the time comes. By mathematical measures, that figure may overestimate some people’s preparedness. As a rule of thumb, Fidelity recommends savers have four times their annual salary saved by age 45 and eight times saved by age 60 to be “on track” to retire.
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Among Gen Xers — generally, those currently aged 46 to 61 — in Northwestern Mutual’s survey, 54% had four times their income or less saved and only 19% had eight times their income or more stashed away.
In other words, to hit the number they’re hoping to reach, many would-be retirees may need to start playing catch up.
Younger savers should ‘save early and save often,’ advisor says
The good news for young people is that, even if you feel like you’re behind, you have plenty of time to get ahead of the curve.
“Save early and save often,” says Jim Shagawat, a certified financial planner with financial advisory AdvicePeriod. “The younger you are, if you can make it a habit to put something out of every paycheck, that’s going to put you way ahead.”
The earlier you start investing, financial experts say, the longer runway you have for your savings to grow at a compounding rate. The current generation of young investors may have a leg up on their older peers, data shows. Gen Z adults in Northwestern Mutual’s survey say they started saving for retirement at age 22, on average, well ahead of millennials at 28 and Gen Xers at 32.
Even if you didn’t start early, you have time to establish consistent savings habits that will drastically increase your chances of success in retirement, says Leo Chubinishvili, a CFP with advisory firm Access Wealth.
“Building that habit is your most important asset,” he says.
Aim to keep the percentage of what you save at least constant, even as you continue to earn more, Chubinishvili recommends. You can turn the dial up higher if you feel that you’ve fallen behind, he says.
“Most people, what they do is they have income, then when they get paid, they spend, and if there’s anything left, then they save,” he says. “But the real way of looking at that equation is to say, when I get paid, I’m going to first save, and then whatever I have left, I’m going to spend.”
Young people would also be wise to eliminate factors that could jeopardize their savings rate or force them to tap their retirement accounts early for cash, says Keller Lindler, a CFP with Northwestern Mutual in McLean, Virginia. That means paying down high-interest debt and building an emergency fund, she says.
And be sure to check that you have adequate insurance coverage, either through your employer or a private insurer, in the event you become disabled, for instance, she says: “Making sure that you have lines of defense up and ready to go, just in case, is super important.”
Older savers can consider pulling other levers
If you’re on the doorstep of retirement, upping your savings rate to hit your magic number may be out of the question, and you can’t go back in time to start investing earlier. Instead, you’ll likely have to focus on what levers you can pull to make your money go further in your non-working years.
One conversation Lindler says she has with clients is whether to pare back what they plan to spend in retirement. Indeed, many future retirees are planning for a more modest lifestyle when they leave their 9-to-5. About 55% of pre-retirees say they plan to spend less in retirement than they currently do, according to Northwestern Mutual. Just 11% plan to spend more.
But cutting back can be easier said than done, says Lindler.
“The reason it’s so hard to shift backwards is because as soon as you get into retirement, and the 9-to-5 schedule is no longer consumed by a working routine, it then becomes, ‘Let’s go out, let’s go on a trip. Let’s go visit the grandkids,'” she says.
Another strategy to stretch your retirement savings is to work longer. Some 41% of U.S. adults say they either plan to work or are currently working during their retirement years, including 50% of Gen Xers and millennials, according to Northwestern Mutual.
While picking up extra work might not be what you envisioned for your retirement, it can have positive ripple effects on the rest of your finances, says Shagawat.
He recalls a client who took up acting part time in retirement after a decades-long career in sales. Doing do was fun and fulfilling, and allowed him to delay taking Social Security — which, in turn, increased the size of the benefit — and trim down the distributions he took from retirement accounts, Shagawat says. As a result, more of the client’s money could stay invested and grow, he notes.
Even working for a few extra years could make a big difference in the math behind how long your money could last in retirement, Shagawat says.
“In our head, retirement comes with this fixed date, but it’s really just a whole range of choices and options,” he says. “It’s not about making big, dramatic, holy smokes decisions. It’s these little, small adjustments that can help prevent bigger problems later.”
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