A typical person now believes they need $1.5 million to retire comfortably, per Northwestern Mutual

A recent study by Northwestern Mutual revealed that adults aged 18 and older now believe they need $1.46 million in savings to retire comfortably. This figure represents a significant 15% increase from the $1.27 million reported the previous year and a substantial 53% surge from the $951,000 target reported in 2020.

"This year, the rising cost of groceries, especially eggs, has become a symbol of inflation in America. In 2024, it's about nest eggs," said Aditi Javeri Gokhale, Chief Strategy Officer, President of Retail Investments, and Head of Institutional Investments at Northwestern Mutual, in a news release. "People's 'magic number' for a comfortable retirement has reached an all-time high, and the gap between their goals and their progress has never been wider."

Despite aiming for nearly $1.5 million on average to afford a comfortable retirement, respondents are still far from reaching this savings target. Currently, the average amount U.S. adults hold in a retirement account is $88,400, down from $89,300 in 2023, according to the study. This decline is likely attributed to higher consumer prices and interest rates, with one study indicating that more workers are tapping into their 401(k) accounts to cover bills and debts.

The retirement savings gap is particularly pronounced for Gen Z adults, who anticipate needing $1.61 million for retirement but have only saved about $22,800 on average so far. Despite this, Gen Z has begun saving much earlier than their boomer counterparts and aim to retire at 60, compared to boomers, who expect to work until 72.

"These figures reflect a significant shift in financial planning in America," says Javeri Gokhale. "Young people today understand the importance of retirement planning and wealth building early in life, giving them a significant advantage over their parents and grandparents."