No two people have exactly the same financial needs during retirement. But Americans, on average, seem to be united about something. Retirement means you’ll need more savings than you previously thought.
According to Northwestern Mutual’s 2026 Planning and Progress Study, U.S. adults say they need an average of $1.46 million to retire comfortably. This is a 15% increase from the $1.26 million required in the 2025 version of the report.
“The new ‘magic number’ reflects a convergence of factors, from continued inflation and longer life expectancies to uncertainty about the future of Social Security,” John Roberts, Northwestern Mutual’s chief field officer, said in a statement.
The data also reveals that many Americans worry they don’t have enough savings. 46% of non-retirees say they don’t expect to be financially prepared when the time comes. By mathematical measures, this number may overestimate some people’s preparedness. As a rule of thumb, Fidelity recommends savers save four times their annual income by age 45 and eight times their annual income by age 60 to be “on track” for retirement.
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According to research from Northwestern Mutual, 54% of Gen
In other words, many would-be retirees may need to start playing catch-up to reach their desired numbers.
Young savers should ‘save early and save often,’ advisor says
The good news for young people is that even if you feel like you’re falling behind, there’s plenty of time to get ahead of the curve.
“Save early, save often,” says Jim Shagawat, a certified financial planner at financial advisory firm AdvicePeriod. “The younger you are, the further you will go if you can get into the habit of paying something out of every paycheck.”
According to financial experts, the sooner you start investing, the longer the runway for your savings to grow with compound interest. Data shows that the current generation of younger investors may have an advantage over older investors. Gen Z adults surveyed by Northwestern Mutual say they started saving for retirement at the average age of 22, far ahead of Millennials at 28 and Gen Xers at 32.
Even if you don’t start early, you still have time to establish consistent savings habits that greatly increase your chances of success in retirement, says Leo Chubinishvili, CFP at advisory firm Access Wealth.
“Developing that habit is your most important asset,” he says.
Chubinishvili recommends keeping the percentage of your savings at least constant, even if your income continues to increase. If you feel like you’re falling behind, he says, it’s okay to turn the dial higher.
“Most people have an income and spend what they get paid and save what’s left,” he says. “But the way you really look at that equation is, when you get paid, you’re going to save first and then you’re going to spend what’s left over.”
Keller Rindler, CFP at Northwestern Mutual in McLean, Virginia, says young people would be wise to eliminate factors that jeopardize their savings rates or jump into retirement accounts early to access cash. That means paying off high-interest debt and building an emergency fund, she says.
And be sure to make sure you have adequate insurance through your employer or private insurance company, in case you become disabled, for example. “It’s really important to have a line of defense and be prepared just in case,” she says.
Older savers can consider pulling other levers
If you’re on the verge of retirement, increasing your savings rate to hit a magic number may be out of the question, and you can’t go back in time to start investing sooner. Instead, you’ll want to focus on what levers you can pull to grow your money even more during periods when you’re not working.
Lindler says one of the conversations he has with clients is whether they plan to reduce their retirement spending. In fact, many future retirees plan for a more frugal lifestyle once they quit their 9-to-5 job. According to Northwestern Mutual, about 55% of pre-retirees say they plan to spend less in retirement than they do now. Just 11% plan to spend more.
But cutting back is easier said than done, Lindler said.
“The reason it’s hard to go back is because as soon as you retire and your 9-to-5 schedule is no longer consumed by work routines, you’re like, ‘Let’s go out, let’s go on a trip, let’s go see the grandkids,'” she says.
Another strategy to increase your retirement savings is to work longer. About 41% of U.S. adults say they plan to work or are currently working in retirement, including 50% of Gen Xers and Millennials, according to Northwestern Mutual.
Taking on an extra job may not look like the retirement you imagined, but it can have a positive ripple effect on the rest of your finances, Shagawat says.
He recalls a client who took up acting part-time after retiring from a decades-long career in sales. It’s fun and fulfilling to do, Shagawat says, and he was able to delay enrolling in Social Security, thereby increasing his benefit amount and reducing the distributions he takes from his retirement accounts. As a result, more of customers’ money can stay invested and grow, he points out.
Shagawat says working just a few more years can make a big difference in calculating how long your money will last in retirement.
“In our minds, retirement is a fixed date, but in reality, it’s just a range of options and choices,” he says. “The point is not to make dramatic, holy decisions. It’s these small, small adjustments that can help prevent big problems down the road.”
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