The average amount that Americans said that they would need to “comfortably” retire has surged to $1.46 million as inflation continues to push up prices, a survey released Monday shows.
The estimate for 2024 is 15% higher than last year and more than 50% higher than what people said in 2020, when the average response was just $951,000, according to the report released by Northwestern Mutual. Despite a rise in the amount that people said they would need, the average amount already saved in 2024 was just $88,400, far lower than the peak of $98,800 in 2021.
“In 2023, the soaring cost of eggs in the grocery store symbolized inflation in America. In 2024, it’s nest eggs,” Aditi Javeri Gokhale, chief strategy officer at Northwestern Mutual, said in a press release. “People’s ‘magic number’ to retire comfortably has exploded to an all-time high, and the gap between their goals and progress has never been wider. Inflation is expanding our expectations for retirement savings, and putting the pressure on to plan and stay disciplined.”
Inflation has stayed persistently elevated over the last few years, most recently rising 3.4% year-over-year in April, far higher than the Federal Reserve’s 2% target. Prices have risen a total of 19.3% since President Joe Biden first took office in January 2021, degrading Americans’ savings, which have declined to $671 billion as of March compared to over a trillion the year prior.
Boomers had the lowest expectations for the amount they needed to retire comfortably at $990,000, while Generation X, Millennials and Generation Z all gave values of $1.56 million and higher, according to the report.
Boomers, on average, estimated that there was a 37% probability that they would outlive their savings compared to 42% of Generation X, according to the report. The average age that Boomers said they would retire was 72, the highest out of any generation, while Generation Z expects to retire by 60.
Pensions across all 50 states exceeded their funding by nearly $7 trillion in 2022, totaling around $21,000 in unfunded liabilities per person. The federal government is also facing an estimated $93.1 trillion in unfunded liabilities related to benefit programs like Social Security.
The White House did not immediately respond to a request to comment from the Daily Caller News Foundation.
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