Americans’ Views on Retirement Savings

A significant concern regarding America’s waning retirement system is the vast discrepancy between what many claim they need to save for their golden years and the actual amount they have stashed away.

The average worker believes they’ll need $1.27 million to retire comfortably, as per a recent study by financial services firm Northwestern Mutual.

Yet, the mean retirement account balance is a mere $89,300. Even those Americans nearing or already in their retirement years are falling short, the study indicates. Most individuals in their 60s and 70s have no more than about $114,000 in retirement savings.

The Gap Between Desired and Actual Retirement Savings in the U.S

“There is a gap between saving for retirement and what you think you need post-retirement,” Aditi Javeri Gokhale, Chief Strategy Officer at Northwestern Mutual, commented.

Lately, due to two years of heightened inflation, which last year hit a 40-year high and remains double the Federal Reserve’s 2% annual target, Americans believe they need to set aside more for retirement. However, this retirement gap persists, with individuals continuing to save significantly less than they’ll require post-employment.

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Americans are delaying their anticipated retirement age. A survey of 2,740 adults found that, on average, they expect to work until age 65, up from 62.6 in 2021. Yet, those who identify as disciplined financial planners anticipate retiring at 63, compared to 67 for those less able to save or focus on planning, Northwestern Mutual discovered.

The widespread shortfall in U.S. retirement savings underscores the importance of early savings, Javeri Gokhale emphasized. “To make your retirement goals realistic, you need to start early, and you need to do comprehensive financial planning when you start early.”

With information from CBS News