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October 25, 2022 at 01:46 PM
What You Need to Know
- According to a Northwestern Mutual report, U.S. adults think they will need $1.25 million to retire comfortably.
- Americans expect to work until age 64 on average, but working with a financial advisor can help lower that number.
- Just 11% plan to delay claiming Social Security benefits.
Another new study suggests that most Americans are falling behind on saving for retirement.
According to a Northwestern Mutual report released Tuesday, U.S. adults think they will need $1.25 million to retire comfortably, a 20% rise from 2021. Yet Americans’ average retirement savings have dropped by 11% from last year to $86,869.
“It’s a period of uncertainty for many people, driven largely by rising inflation and volatility in the markets,” Christian Mitchell, chief customer officer at Northwestern Mutual, said in a statement. “We’ve also seen upticks in spending year-over-year not only as a result of inflation, but also as people have resumed a sense of normalcy in their lives following the earlier days of the pandemic.”
As a result, Mitchell said, many people are recalibrating their thinking about how much they will need to retire and how long it will take them to get there.
The Harris Poll conducted an online survey on behalf of Northwestern Mutual in February among 2,381 American adults.
The survey found low confidence among respondents about their retirement preparedness, and not much faith in Social Security as a backstop. Forty-three percent said they do not expect to be financially ready for retirement when the time comes. And 45% said they can imagine a time when Social Security no longer exists.
At the same time, one-third of those surveyed expect to live to 100, and an equal third said there is a better than 50% chance they may outlive their savings. But 36% reported that they have not proactively addressed this concern.
