New survey reveals the magic number for US retirement

While Americans say they will need more money after retirement, the average amount in a retirement savings account this year fell to $86,869, down 11% from 2021, according to the survey.

The expected retirement age has also risen to 64, up from 62.6 last year.

Christian Mitchell, chief client officer of Northwestern Mutual, said rising inflation and volatility in financial markets are affecting people’s mindsets. This changes people’s expectations about how much savings they will need for retirement, he said.

The survey, which included 2,381 American adults in February, comes as consumers were Shrinking due to high inflation. This has put pressure on their purchasing power and ability to save.

Stock and bond markets also have fell sharply this year. Typical wallet 60/40Investors put 60% of their money in the stock market and 40% of their money in bonds, on track for the worst returns in 100 years as of mid-October, according to

American bank.

With inflation soaring, the federal government has taken steps to try to ease the pain for retirees and investors.

the government Increase Social Security Checks by 8.7% for 2023, the largest cost-of-living adjustment for benefits in four decades. The Internal Revenue Service also provided Inflation Adjustments For 401(k) savings accounts, contribution limits increase by $2,000 to $22,500 for 2023. About 60 million American workers have 401(k) plans, according to the Investment Company Institute.

The Northwestern Mutual poll found that many Americans are concerned about their retirement prospects. About four in ten people said they don’t think they will have enough money when they retire. Nearly half of the people surveyed said they could envision scenarios where Social Security no longer exists.

Mr. Mitchell said how much money a family will need to retire depends on many variables, including where people live and their standard of living. He said whether a person expects to care for parents or children in retirement are also factors to consider.

“The $1.25 million for some families, that might be right, it might be too high, it could be too low,” Mitchell said.

The Covid-19 pandemic has also shaken up Americans’ retirement plans. About one in four people said they now plan to retire later due to the pandemic. Among those deferring retirement, 59% said they wanted to work more to save money. And 45% said they were concerned about rising healthcare costs or incurring unexpected medical costs.

But about 15% of people said they intended to retire early because of the pandemic.

Write to Joseph de Avila at [email protected]