Can You Guess What Americans Think They Need To Retire Comfortably? Hint: The 'Magic Number' Just Dropped From Last Year

If you've ever assumed retirement meant having a seven-figure nest egg, you're in good company — and maybe a little stressed.

For years, Americans have treated the $1 million mark as the gold standard for retiring comfortably. Anything less? Cue the panic attacks.

But according to Northwestern Mutual's just-released 2025 Planning & Progress Study, the average American now believes they need $1.26 million tucked away to retire in peace. That's actually down from $1.46 million last year.

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Sure, the so-called magic number dropped by $200,000, but don't pop the champagne just yet. According to the same study, most Americans are still wildly unprepared. More than half – 51% – say it's somewhat or very likely they'll outlive their savings. Only 16% feel confident that outliving their savings is "very unlikely."  

So if your retirement plan is "hope for the best," you're not alone.

The ‘magic number' to retire comfortably may be down this year, but it's still far beyond what many people actually have. And the gap isn't just wide — it's a canyon. 

Vanguard's 2024 report puts the average 401(k) balance across all age groups at just $134,128. That's barely a tenth of what Americans say they'll need to retire comfortably.

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And what's behind the drop? Inflation is still top of mind, but it's cooled off—dropping from around 6% in 2023 to about 3% in 2024. That doesn't mean prices are falling; it just means they're not rising quite as fast. Groceries still feel like a splurge and rent still makes you cry, but apparently, that slight dip was enough for Americans to shave down their expectations.

Either way, the new target still feels like a stretch. One in four Americans has just a single year of income saved. Among Gen X'ers, 52% have saved up to three times their annual income, but  54% don't think they'll be financially ready to retire when the time comes. 

Which raises a fair question—not from a study or expert, just plain observation: Are Americans adjusting the number because they think they can genuinely live on less, or have they just accepted that $1.26 million sounds more reachable than $1.46 million? Maybe this is optimism. Maybe it's financial fatigue. 

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If you're wondering how anyone hits that $1.26 million target: you either start young or start wealthy. To get there by age 65, a 20-year-old would need to sock away $330 a month at a 7% return. Wait until you're 50? That jumps to a casual $3,958 per month. 

Yes, the goal dipped—but the struggle to reach it hasn't. Americans may be adjusting expectations, but most still have a long way to go before retirement feels anything close to "comfortable."

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