Here’s the New Magic Number for Living Comfortably in Retirement

How much money will you need to retire? Your answer is likely to differ depending on your age.

Recently, Northwestern Mutual surveyed 2,740 adults for its 2023 Planning & Progress Study and asked them how much money they need to save to retire comfortably.

As a group, they answered $1.27 million. That is up from $1.25 million in 2022 — and it also is considerably higher than the $89,300 the average respondent has saved for retirement to date.

However, the group average hides the fact that the specific dollar figure named by survey respondents varied quite a bit depending on their age.

From newbie investors in their 20s to veteran ones in their 70s, here are the new “magic numbers” that people say they need to achieve before retiring.

People in their 20s

The average amount that survey respondents in this age group:

• Expect to need for a comfortable retirement: $1.2 million
• Have saved for retirement currently: $35,800

Savers in their 20s have a long road ahead before they retire. They believe they will need $1.2 million to retire comfortably — a relatively low estimate compared with the amounts identified by some other age groups.

These young savers have accumulated just a fraction of that amount, which is only natural given their age.

People in their 30s

The average amount that survey respondents in this age group:

• Expect to need for a comfortable retirement: $1.44 million
• Have saved for retirement currently: $67,400

By your 30s, career prospects usually have brightened considerably. This is the age when you take on more responsibility and see your pay rise as a result.

Some people start getting serious about investing for the first time during their 30s. If you are among them, check out “5 Simple Ways to Invest Your Retirement Savings.”

People in their 40s

The average amount that survey respondents in this age group:

• Expect to need for a comfortable retirement: $1.28 million
• Have saved for retirement currently: $77,400

Savers in their 40s have reached a sort of midpoint in their retirement savings journey. Those who have been saving diligently can pause for a moment, pat themselves on the back and move on to the second half of their efforts to build a nest egg.

For others, the 40s are the decade to make up for lost time. These folks will discover valuable advice in “7 Tips for Retirement Saving After 40.”

People in their 50s

The average amount that survey respondents in this age group:

• Expect to need for a comfortable retirement: $1.56 million
• Have saved for retirement currently: $110,900

By your 50s, time is running out to save large sums of money and earmark them for retirement.

Fortunately, many people in this age group are in their peak earning years, and this is the time for them to make one last run at the brass ring when it comes to saving for their golden years.

People in their 60s

The average amount that survey respondents in this age group:

• Expect to need for a comfortable retirement: $968,000
• Have saved for retirement currently: $112,500

Compared with younger folks, there is a steep drop in the amount of money that people in their 60s believe they will need to retire comfortably. Perhaps this is because many of these folks are in retirement already and are discovering expenses are lower than they feared they would be.

Or maybe people in their 60s are simply in denial. After all, that is a natural response when you have only saved a tiny fraction — $112,500 — of what you project you might need during your golden years.

If you are still working at this age but are far behind in building a nest egg, it’s time to turn to the “7 Fast Ways to Catch Up on Retirement Savings.”

People in their 70s

The average amount that survey respondents in this age group:

• Expect to need for a comfortable retirement: $936,000
• Have saved for retirement currently: $113,900

Retirees in their 70s have been out of the workforce for a while. And although they likely have many years of retirement ahead, they also can see the finish line.

So, it is not a huge surprise that people in this age group name a more modest figure as being sufficient for a comfortable retirement. However, it’s hard to see how they will close the gap of more than $800,000 between what they have actually saved for retirement and what they predict they will need.

If you are in your 70s — or at any other age — and need help building a plan to stretch your dollars through retirement, stop by the Money Talks News Solutions Center and find a great financial adviser.