Americans Now Bizarrely Think They Need $200K Less to Retire

"When you think about how much you need to retire, it won't come as any surprise to learn that the amount is different for everyone. There are a whole lot of variables that go into deciding this amount, though there is some alignment on needing a certain multiple of your highest income level to sustain your lifestyle. It's an unfortunate truth that most Americans don't have enough saved up to enjoy retirement properly."

"Interestingly enough, according to a 2025 Northwestern Mutual Planning & Progress study, the average American now says they need $1.26 million to retire. Curiously, this number is actually $200,000 less than what Americans believed they needed in 2024 and matches the same number people answered with in 2022, which immediately begs the question as to why. To give a little more context, the Northwestern Mutual study indicates that this $1.26 million number is based on monthly contributions that have earned approximately 7% annually."

"This means that someone at 20 years old would have been saving around $330 a month, while at 50, this monthly savings would have needed to start at $3,958 per month. It won't come as much of a surprise to learn that most Americans indicate they have less than they say. The same survey says that one out of every four Americans, or 25% says they have less than one year of their current annual income set aside for"

Retirement needs vary widely based on individual circumstances, but many Americans are falling short of adequate savings. The average American now cites $1.26 million as the retirement target, a decline of $200,000 from 2024 and equal to the 2022 figure. That $1.26 million assumes monthly contributions compounding at roughly 7% annually, which translates to about $330 per month starting at age 20 and roughly $3,958 per month if starting at age 50. A significant shift toward paying down debt has reduced the capacity to save, and about 25% of Americans report having under one year of income saved.

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