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There was a Persistent gap between how much money savers tidy up and how much they think they will need once they retire.
However, this year, many Americans reduce their expectations.
For 2025, the “magic number” to retire comfortably is an average drop of $ 1.26 million, a drop of $ 200,000 compared to the $ 1.46 million reported last year, according to a new study of Northwestern Mutualwhich interviewed more than 4,600 adults in January.
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“The” magic number “of the Americans to retire is comfortably lowered,” said John Roberts, field director of Northwestern Mutual, in a statement. Inflation has declineSaid Roberts, and therefore people adjust their perspectives.
The figure of 2025 is roughly in accordance with the estimates of 2023 and 2022, which were respectively 1.27 million dollars and $ 1.25 million.
However, this retirement objective is still high, added Roberts, “far beyond what many people have really saved”.
“Magic number” compared to average pension sales
Last year, the positive conditions of the market helped to propel the sales accounts of retirement accounts near new heights.
In the fourth quarter of 2024, 401 (K) And individual retirement account The sales won the highest second average ever -recorded average, stimulated by better savings behavior and action gains, according to the latest data from Fidelity Investments, the largest supplier in the country of savings plans 401 (K).
The average 401 (K) Balance was $ 131,700 in the fourth quarter, while IRA's average balance amounted to $ 127,534, according to Fidelity.
However, since then, American markets whipped. As of April 21, the S&P 500 is down approximately 10% over a year, while the Nasdaq Composite flowed more than 15% in 2025. The Industrial average Dow Jones fell 8%.
“The 2025 stock market has not spared many savers,” said Winnie SoleilCo-founder and managing director of Sun Group Wealth Partners, based in Irvine, California. “Your wallet is probably lower than it was before the new year.”
Why confidence of retirement flows
Even after lowering the bar, more than half or 51% of Americans from the Northwestern Mutual study expected their savings. Only 16% said that this result would be “very unlikely”.
Last year, 54% of workers who were not yet retired said they expected to be Financially ready For retirement when the time comes.
Currently, only about two thirds, or 67%, of Americans during their planning years have confidence in their retirement prospects – Down 7 percentage points From last year, according to a separate Retirement planning study out of loyalty.
Workers today are largely alone in terms of their retirement security, which has also wreaked havoc on the confidence of retirement. “In particular, the current generation of retirees could be the last to use foreseeable sources of income such as pensions as the main way to finance retirement,” said Rita Assaf, vice-president of retirement offers at Fidelity Investments, in a statement.
“Change to relying on retirement savings gives you the importance of anchoring you in a financial plan as soon as you can,” said Assaf.
Retirement rules
According to Fidelity, there are some simple basic rules for retirement planning, as Save your income 10 times by retirement age and the so-called 4% rule For retirement income, which suggests that retirees should be able to safely withdraw 4% of their investments, after adapting to inflation, each year retired.
Other experts say that there is no magic number for a retirement savings objective, but to put aside 15% of your annual salary Before taxes is a good starting point.
If your retirement date is still in years, “answer an experienced financial advisor as soon as you can assess your future income needs and develop a strategy as soon as possible,” said Sun, member of CNBC financial advisor advice.
Alternatively, if your retirement date is soon: “Make sure your emergency fund is funded, tighten your expenses, plan to establish a heloc (equity line of equity) if you have equity in your home as an emergency line, look for ways to make an additional income while you can, and above all, meet an advisor to ensure that you have a complete image of the retirement that will”
