Americans are lowering their expectations for retirement. The new “magic number” is $1.26 million. That’s how much the average worker now thinks they will need to retire comfortably.
Last year, the number was $1.46 million, according to a Northwestern Mutual survey. The drop of $200,000 shows that many are adjusting their goals.
Why the change? Experts say people are becoming more realistic. Many see the high cost of living, slow wage growth, and rising debt. Instead of aiming too high, they are setting targets they feel they can actually reach.
At the same time, confidence about retirement is still low. Only 2 in 10 people believe they will have enough money to live well after they stop working. A Kiplinger report notes that many households are not saving enough each year to stay on track.
Gen Z and millennials are especially worried. A Wall Street Journal analysis found that younger workers expect to work longer, rely on side hustles, or move to cheaper cities to cut costs.
Still, there are signs of hope. More Americans are joining employer 401(k) plans. High-yield savings accounts are also helping people grow their money faster than before. Some workers are also choosing to delay retirement by a few years, giving their savings more time to build.
What This Means for Retirees
- The gap between dreams and reality is narrowing.
- Workers are setting more achievable savings targets.
- Delayed retirement and side income are becoming part of the plan.
- Even with lower goals, steady saving and smart investing remain critical.
Bottom line: Americans may not feel rich, but they are adapting. By aiming for $1.26 million instead of $1.46 million, retirement planning looks more within reach. The challenge is making every dollar count.
