Here's What Americans Think They'll Need for Retirement

On average, Americans think they’ll need $1.46 million saved to retire comfortably. That’s according to the 2026 Northwestern Mutual Planning & Progress study, which also found that people aren’t confident that they will have saved enough.

Nearly half (48 percent) of Americans think it’s somewhat likely or very likely that they’ll outlive their savings, according to the study. In addition, 46 percent of Americans say they don’t expect to be financially prepared for retirement.

“The new ‘magic number’ estimate reflects a convergence of factors that are leading people to think they will need more to sustain a comfortable retirement—from persistent inflation and longer life expectancies to uncertainty about the future of Social Security,” said John Roberts, chief field officer at Northwestern Mutual. “Retirement is increasingly complex and Americans are responding by setting higher expectations for what they’ll need.”

Yet despite concerns about not having enough, nearly a quarter (23 percent) of those with retirement savings say they have just one year or less of their current annual income set aside for it. The good news is that it’s never too late to get started. And working with the right financial advisor can help you create a customized plan designed to fund the retirement of your dreams.

How much do I need to save to get to $1.46 million?

A total like $1.46 million might seem like a big number—because it is. But it’s attainable for many people. The key to getting to a goal is saving consistently over time. The younger you start, the better—thanks to the power of compound interest.

The amount you need to save each month to reach your goal at retirement depends on the expected annual return rate of your investments.

To give you a starting point, let’s say you’ll get a seven percent return on your retirement savings each year. (Of course, the actual return rate will vary.) If you’re 35 years from retirement, you’ll need to invest about $385 each month to reach your goal. But if you don’t get started until you’re 15 years from retirement, you’ll need $4,607 every month to get there.

How much do I need in retirement savings?

While averages are interesting, the amount you actually need to save is unique to you. Your need will be based on what your retirement might cost. To determine how much you need, here are three questions to think about and discuss with your advisor:

Get the most from your retirement savings

Saving consistently for retirement is great. But a little strategy around how and where you save can help you make your money work harder. That’s because using a mix of financial tools can help you grow your wealth while also protecting you from common retirement risks including taxes, market volatility, inflation—and even the risk that you will live longer than expected.

Financial tools that can help you minimize retirement risks

Traditional 401(k)s or IRAs

These accounts allow you to save for retirement without paying taxes on the money you save until you get to retirement. (And you’ll generally get a tax deduction for your contributions made today.) But that’s the catch: You’ll owe tax when you withdraw money from the accounts in retirement. And you’ll eventually be required to withdraw this money and pay taxes on it.

Roth accounts

Roth accounts are offered as IRAs or 401(k)s, but they are taxed differently than other retirement accounts. You’ll pay tax today on funds you contribute but generally will not pay taxes on any withdrawals once you turn 59 ½ .

Investments through brokerage accounts

These could be investments over and above what you have contributed to tax-advantaged accounts such as 401(k)s and Roth accounts. While 401(k)s and Roth accounts have rules about how much you can contribute and when you can use your savings, there are no such rules with brokerage accounts—which can make them more flexible.

Whole life insurance

Whole life insurance is a flexible financial tool that you can use for a variety of reasons—thanks to its cash value. Cash value in a whole life policy is guaranteed to grow over time and is unaffected by the ups and downs of the markets, making it a great option for supplementing your retirement savings during a downturn.

Guaranteed income

This is money from Social Security, pensions or income annuities. We call it guaranteed because in retirement, it comes to you on a regular basis, like a paycheck, no matter how long you live and is unaffected by the market.

Long-term care planning

In addition to planning for general health care costs, it’s important to have a long-term care plan in place. This approach gives you choice and control over your future care—even if it’s something you’d rather not think about. You can strategically prepare for these potential expenses by utilizing personal savings and income or by leveraging cost-effective solutions such as dedicated long-term care insurance, life insurance riders and hybrid policies that offer both a death benefit and living benefits for care.

A mix of financial tools can take you further

There are several types of accounts designed to help give you an income during retirement. Each financial tool has its own pros and cons and impact on taxes in retirement.

Investments are a great start for retirement, but investments alone will get you only so far. And independent research found that a comprehensive retirement plan that includes a balanced mix of investments, life insurance and an income annuity can help you get a higher income and leave more behind compared with investments alone.

Your Northwestern Mutual financial advisor will help you determine the right mix for your goals. They’ll get to know you and what’s important to you, then help build a financial plan to put you on track toward your retirement goal. As life changes, you can adjust the plan together, giving you confidence that you’ll be prepared when retirement comes.

This publication is not intended as tax advice. Financial representatives do not render tax advice. Consult with a tax professional for legal or tax advice that is specific to your situation.

All investments carry some level of risk, including loss of principal invested.

The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance cash value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.