For the last couple of years Northwestern Mutual has been surveying close to 5,000 people about the amount of retirement savings they expect to need, and this year the number went up. Pre-retirees are now on average expecting to need close to 1.46 Million dollars in retirement balances before they can retire. Up 15% from just one year ago, the high costs of inflation observed in everyday items like food, energy, and housing have pre-retirees expecting the cost of living in the future will be more than previously thought. However, The Fed reports people ages 65-74 currently have an average of just $600,000 in retirement savings, and the average American has an average of $300,000, highlighting a growing gap between retirement expectations and reality.
So how much do you need to retire?
As much as you might like an absolute answer, there is no single magic number, no one-size-fits-all formula for knowing when you’ll be financially independent.
The actual size of the nest egg you will need depends on factors like your spending habits, marital status, expected longevity, where you live, debt, charitable giving, and more. Your number is personal to you and a financial planner can personalize a strategy to get you there, no matter where you’re starting from and what you have to work with.
