How Much Each Generation Thinks They Need To Retire Comfortably — One Said $1.65M
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Gabrielle Olya
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Amen Oyiboke
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The average American now believes they will need $1.46 million to retire comfortably, a recent Northwestern Mutual study found. But that number does vary greatly by generation, with estimated retirement savings needed ranging from $990,000 all the way up to $1.65 million.
Here’s a look at what each generation believes they will need to retire comfortably.
Millennials Believe They Will Need the Most Money To Retire Comfortably
The Northwestern Mutual study found that millennials have the loftiest retirement savings target, with the average millennial predicting that they will need $1.65 million to retire comfortably. Gen Z was not far behind — this generation is aiming for a $1.63 million nest egg for a comfortable retirement.
“Millennials and Gen Z clients of mine understand that they may live longer than previous generations, which means their retirement must account for a longer period,” said Kurt Rupprecht, partner and private wealth advisor at Northwestern Mutual’s K Street Financial, a private client group.
“With advancements in healthcare, medicine, and quality of life, it’s understandable for people to think their lifespans will stretch farther than in the past,” he said. “While it’s exciting to think about a longer, more enjoyable life, it’s something we need to account for financially.”
These generations might also be less reliant on Social Security.
“Younger generations are seeing the headlines of an uncertain future for Social Security — typically a lifeline for previous generations,” Rupprecht said. “The sentiment from that is that more of the burden of responsibility may fall on them to account for their retirement years.”
Older Generations Believe They Will Need Less To Retire Comfortably
When it comes to retirement savings expectations, Gen X fell in the middle, with the average Gen X-er stating that they would need $1.56 million to retire comfortably. Baby boomers said they would need just shy of $1 million — $990,000 — for a comfortable retirement.
As for what these generations will actually need to retire comfortably, Rupprecht said that it really comes down to the individual.
“Everyone, regardless of age, deserves their own ‘magic number’ for retirement,” he said. “For my clients and beyond, everyone has a unique set of circumstances that will shape exactly what that number is. It’s imperative to work with a financial professional to create a customized plan that will help set specific goals while accumulating and protecting wealth.”
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