To retire comfortably, American workers believe they will need $1.27 million saved, according to Northwestern Mutual’s 2023 Planning & Progress study — and while readiness is improving, a big disparity still exists between what workers think they will need to retire and what they’ve actually saved.
Savings expectations only continue to increase, as well; workers reported they would need $1.25 million saved last year to retire comfortably. But the average amount Americans have saved for retirement continues to rise “modestly,” according to the report, growing by 3% to $89,300 from $86,869 in 2022.
How much do American workers believe they need for retirement?
Generation Z remains most confident that they will be financially ready for retirement, while older generations are more pessimistic. More than half of Gen X say they will not be ready, and nearly half of millennials and baby boomers say the same, according to Northwestern Mutual.
That confidence also directly reflects on long people expect to work — a growing question as employers continue to grapple with succession planning and talent shortages amid an aging workforce.
Boomers, for example, on average plan to work until they are 71 years old, while Gen Z expects to be able to retire around age 60.
The report comes as recessionary concerns — and continued pressures in the wake of the pandemic — prompt workers to delve into their savings accounts to cover expenses, according to survey results released in July by the Transamerica Center for Retirement Studies.
Workers, also, are increasingly working past the traditional retirement age — and while financial need is increasingly part of why, workers also indicate they want to work to keep their minds active and maintain a sense of purpose in their lives, according to a report from Easterseals and Voya Cares.
Employers may, in turn, may want to consider tapping into older generational pools to find workers, especially those desperate to fill open roles, experts previously said.
