A substantial gap exists between the amount of money Americans need to retire comfortably and their actual savings, according to Northwestern Mutual's 2026 financial planning study. The study recommends saving at least $1.46 million for a secure retirement, yet a 2022 federal consumer finances survey indicated that individuals between 65 and 74 years old typically possess only about $200,000 in retirement accounts. This amount represents approximately 13% of the recommended savings.
Nearly half of Americans surveyed do not believe they will have saved enough for retirement, and an additional 48% anticipate their retirement funds will be depleted before they pass away. John Roberts, executive vice president at Northwestern Mutual, noted a growing disparity between retirement expectations and actual financial preparedness.
The $1.46 million figure serves as a target guidepost, which has seen an increase from previous years. In 2022, Northwestern Mutual's recommendation was $1.25 million. Despite not meeting these targets, many individuals still manage to retire, often with support from sources like Social Security to maintain a sustainable lifestyle.
Alternative retirement planning advice, such as that from Fidelity, suggests accumulating savings equivalent to 10 times one's annual salary. Based on the 2024 median household income of $83,730, this would amount to approximately $800,000. However, the majority of Americans are still far from this goal, with only 4% of Gen X respondents in the Northwestern survey reporting they have achieved this savings benchmark. Consequently, about half of Gen Xers expressed concerns about their financial readiness for retirement and indicated a likelihood of continuing to work past traditional retirement age.
In contrast, younger generations appear to be on a more promising trajectory. Gen Z, for instance, typically begins saving for retirement by age 22, considerably earlier than Gen X, which generally starts at age 32, according to the study.