Year-round warm weather, hitting the links, and kicking back with the grandkids has long been the quintessential American retirement daydream. While that’s still out of reach for many Americans, most still hope and expect to retire comfortably after 40-plus years in the workforce.
But what exactly does an ideal retirement look like for Americans? According to a Northwestern Mutual report released this week, Americans think they need $1.5 million to retire comfortably. That’s a $200,000 jump from last year, showing it’s climbing faster than most workers can even save.
The study, based on a survey of 4,375 adults, found that inflation, longer life expectancies, and growing anxiety about the future of Social Security are all pushing the ideal retirement figure higher.
“The new ‘magic number’ reflects a convergence of factors—from persistent inflation and longer life expectancies to uncertainty about the future of Social Security,” John Roberts, chief field officer at Northwestern Mutual, said in a statement. “Retirement is increasingly complex, and Americans are responding by setting higher expectations for what they’ll need.”
The gap between expectation and reality
The problem with retirement savings isn’t just that the target is high. It’s that most Americans are way off from hitting it.
Federal Reserve data show that the median retirement savings for Americans aged 55 to 64 is just $185,000, and for those aged 65 to 72, it’s only $200,000. That’s only about 13% of what Americans think they need to retire comfortably, according to the Northwestern Mutual data.
BlackRock CEO Larry Fink has also been outspoken about how unprepared most Americans are for retirement.
BlackRock, the world’s largest asset management firm with $14 trillion in assets under management, surveyed 1,000 registered voters, asking how much they’d need to retire comfortably, and the average response was roughly $2.1 million—even more than the Northwestern Mutual study showed.
“That’s a lot. More than I was expecting,” Fink wrote in a 2025 shareholder letter. And “almost no one is close,” considering 62% of those surveyed had less than $150,000 saved for retirement (or only about 7% of what they think they need to retire comfortably).
Is $1.46 million even attainable?
For most Americans, achieving $1.46 million in retirement will depend heavily on when they start saving.
Northwestern Mutual did the math for us: assuming a 7% annual return on investments, a worker 35 years from retirement needs to save about $385 per month to reach $1.46 million. But if you wait until just 15 years out from retirement, that monthly savings amount would have to jump to more than $4,600.
The math is even tighter when you factor in that 33% of private-sector workers don’t have access to an employer-sponsored retirement account, like a 401(k), according to the National Bureau of Economic Research. Plus, 74% of Gen Z, millennials, and Gen X say they’re struggling to save for retirement because of competing financial priorities, a phenomenon Goldman Sachs calls a “financial vortex,” with 42% of younger workers who say they live paycheck to paycheck.
And it’s not a problem that’s going away, according to Goldman Sachs’ 2025 Retirement Survey & Insights report.
“The long-term reality of managing competing financial priorities remains a persistent challenge for a substantial segment of the working population, particularly for those earlier in their careers,” according to Goldman Sachs.
To be sure: “Averages are interesting, [but] the amount you actually need to save is unique to you,” according to Northwestern Mutual. “Your need will be based on what your retirement might cost.” They suggest discussing with a financial advisor what you want to do in retirement, when you plan to retire, and how long you anticipate your life expectancy to be.
Social Security isn’t the safety net it used to be
On top of Americans having to worry about saving enough money for retirement through a 401(k) or other savings accounts, there’s also a looming threat to Social Security. According to a new report from the Penn Wharton Budget Model, Social Security’s Old-Age and Survivors Insurance Trust Fund is on track to run dry by 2032—just six years away. Without congressional action, beneficiaries could face cuts of up to 24% in their payments, according to the Committee for a Responsible Federal Budget.
The average Social Security retirement benefit rose to roughly $2,071 a month in 2026 following a 2.8% cost-of-living adjustment. That’s a meaningful difference, but nowhere near enough to bridge a seven-figure savings gap.
Experts have also said America’s broader retirement system earns just a C-plus grade, with persistent gaps in coverage, savings adequacy, and longevity protection.
“The U.S. sits in the middle of the global rankings while countries like Australia lead the pack,” Chris Mahoney, the global retirement leader at Mercer, wrote in a March commentary for Fortune. “Without reform, more Americans risk reaching retirement without enough income—or the tools to access what they’ve saved.”
The dream of a comfortable retirement filled with leisure activities, such as golf and spending time with family, continues to be a priority for many Americans. Yet, as highlighted in a recent Northwestern Mutual report, the path to achieving this dream is fraught with challenges, particularly regarding financial preparedness for retirement.
According to the report, Americans now believe that they need approximately $1.5 million to retire comfortably—an increase of $200,000 from the previous year. This rising expectation is attributed to several factors, including persistent inflation, increasing life expectancies, and concerns about the future viability of Social Security. John Roberts, Northwestern Mutual’s chief field officer, emphasized that the complexity of retirement planning is driving Americans to set higher financial targets.
However, a significant gap exists between what people think they need and what they have saved. Federal Reserve data shows that the median retirement savings for Americans in their late 50s to early 70s is only around $185,000 to $200,000, representing merely 13% of the amount they believe is necessary. This discrepancy is echoed by BlackRock’s CEO, Larry Fink, who noted that a survey revealed the average retirement savings target among respondents is about $2.1 million. Alarmingly, 62% of those surveyed reported having less than $150,000 saved.
Achieving the ideal retirement savings figure of $1.46 million is heavily dependent on when individuals begin saving. Northwestern Mutual’s analysis suggests that a person starting to save at age 30 would need to set aside about $385 per month to reach that goal by retirement. However, if they delay saving until 15 years before retirement, their monthly contribution would need to exceed $4,600, a daunting figure for many.
Moreover, the issue is compounded by the fact that 33% of private-sector workers lack access to employer-sponsored retirement accounts, such as 401(k)s. Furthermore, a significant portion of younger generations—74% of Gen Z, millennials, and Gen X—report difficulties in saving for retirement due to competing financial obligations, with many living paycheck to paycheck, as per Goldman Sachs’ findings.
The challenges don’t end with personal savings. The stability of Social Security benefits is increasingly uncertain, with projections indicating that the program’s trust fund could be depleted by 2032, risking up to a 24% cut in benefits without legislative intervention. The average monthly Social Security benefit of around $2,071 is insufficient to fill the significant savings gap that Americans face.
Overall, experts have criticized the U.S. retirement system, giving it a mediocre grade due to widespread issues such as inadequate coverage and savings, as well as insufficient protections against longevity risk. Chris Mahoney, a global retirement leader at Mercer, pointed out that the U.S. ranks poorly compared to other nations, such as Australia, in terms of retirement preparedness.
In conclusion, while the aspiration for a comfortable retirement remains strong among Americans, the financial realities present significant hurdles. The need for adequate savings plans, access to retirement accounts, and a robust Social Security system is more critical than ever for ensuring a secure retirement for future generations. Individuals are encouraged to consult financial advisors to tailor their retirement savings strategies based on personal circumstances and goals.
