Expert on retirement savings
Indira Venkat serves as the Senior Vice President of Research at AARP, she joins LiveNOW from FOX to discuss a 2024 survey that found more than 20% of adults ages 50 and older have no retirement savings. Venkat explains how Americans are worried about covering basic expenses.
The “magic number” that Americans believe they need to retire comfortably is dropping, according to a new study.
The research, published this week by Northwestern Mutual, also found that 25% have just one year or less of their current annual income put aside for retirement.
FILE – An elderly couple walk hand-in-hand in San Antonio, Texas. (Photo by Robert Alexander/Getty Images)
Here’s what to know about retirement savings:
Retirement savings ‘magic number’ drops in 2025
By the numbers:
Northwestern Mutual’s 2025 Planning & Progress Study, published on April 14, found that Americans’ “magic number” to retire comfortably in 2025 is $1.26 million. That’s $200,000 less than the $1.46 million reported last year – and nearly flat with 2022 and 2023 estimates, the research found.
The study comes from a survey conducted online in January involving more than 4,600 U.S. adults.
For Gen X, or those born between the mid-1960s and the early 1980s and approaching retirement, 52% have 3x their current annual income or less saved. The majority (54%) believe they will not be financially prepared for retirement when the time comes, according to the study.
More than half (51%) of Americans think it’s “somewhat or very likely” that they’ll outlive their retirement savings, according to the study.
What they’re saying:
“Americans’ ‘magic number’ to retire comfortably has come down – but it remains high, far beyond what many people have actually saved,” John Roberts, chief field officer at Northwestern Mutual, said in a statement. “One explanation for the new number could be inflation – while still people’s #1 concern – isn’t as elevated as it was in recent years.”
Americans’ confidence about retirement savings
What we know:
When looking at different generations, Gen Z was found to be the most confident that they’ll be financially prepared for retirement, at 63%.
On the opposite end, Gen X was the only generation with a majority of respondents (54%) saying that they don’t think they’ll be ready to retire.
Retirement savings goals by age
Timeline:
The amount Americans need to put aside each month to accumulate the “magic number” of $1.26 million by age 65 depends on several factors, including the age they start saving, according to Northwestern Mutual.
The longer they wait means the more they’ll need to invest to reach that goal.
- Individuals starting at age 20 would need to invest $330 per month.
- Those starting at age 30 would need to set aside $695 per month – assuming a 7% rate of return compounded daily.
- Those starting at age 40 would need to save $1,547 per month.
- If they postpone saving until age 50, they would need to invest $3,958 per month.
These figures assume that individuals save regularly and never borrow from their retirement savings accounts before reaching age 65, Northwestern Mutual said.
In general, contributing 5% to 15% percent of a person’s salary toward their 401(k) “is a good retirement savings goal, if possible,” the company says.
Fidelity, another notable financial services company, suggests the following age-based milestones when it comes to retirement by age 67: At least 1x a worker’s income by age 30, 3x by 40, 6x by 50, and 8x by 60.
