: Americans think they need $1.25 million to retire. Is that enough?

by | Oct 27, 2022 | Stock Market

Americans think they need $1.25 million to retire comfortably, new research says — but even though that number may seem hefty, it still may not be enough. A study from Northwestern Mutual released this week found that U.S. adults anticipate they will need $1.25 million to retire comfortably, an amount that’s 20% higher than it was in 2021. That shift in goals comes as Americans’ average retirement savings has dropped 11% to $86,869, down from $98,800 last year.

For many people, the idea of saving $1.25 million may seem insurmountable, but even that amount may not be sufficient to fund a retirement that could last decades, according to experts. Read: The limit for 401(k) contributions will jump nearly 10% in 2023, but it’s not always a good idea to max out your retirement investments “There’s this increasing gap between where people are and where they might need to be. We’re seeing the financial anxiety gap getting larger,” said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “People are really worried about retirement.” While there is no magic number that fits all retirees, one general rule of thumb says people should aim to have 70% of their pre-retirement income available for each year of their retirement. But that number might be conservative. Steve Azoury, owner of financial services firm Azoury Financial in Troy, Mich., said people should plan to have as much as 80% to 90% of their pre-retireme …

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