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Age in America: Is there a 'magic number' Americans need to retire comfortably?

Wealth management adviser Gordon Whittaker shared the realities and myths regarding Americans' beliefs on retirement savings.
Posted at 3:40 PM, Jun 18, 2024

Americans are living longer, healthier lives, and that means adults are working longer and retiring later, many with the belief that they must save up more money before doing so.

A survey from MassMutual earlier this year found the average retirement age in the U.S. is 62 years old. To compare, the average retirement age in 1991 was 57.

And with the increase in retirement age has come a rapid increase in what Americans feel is the "magic number" for their retirement savings, with a Northwestern Mutual survey finding U.S. adults believe the comfortable retirement number is $1.46 million. That's up 15% from last year alone, and in 2020 it was $951,000.

Meanwhile, the survey also found that belief didn't necessarily translate to an increase in real savings. The average amount Americans had saved for retirement this year was $88,400, a slight drop from the $89,300 reported last year and much lower than the five-year peak of almost $100,000 in 2021.

This understates the massive gap between the amount people have saved and what they expect they'll need to save for retirement, which is at a five-year high of $1.37 million. In 2020, the gap was $864,000.

So is that feeling many Americans appear to have of needing that "magic number" just that, a feeling? Gordon Whittaker, a wealth management adviser with Merill Lynch, told Scripps News no; it's a reality.

He pointed to pension plans and Social Security helping older generations retire decades ago, and now that corporate America has largely done away with the former, the responsibility to save for retirement falls "exclusively" on employees. That's resulted in a "massive shortfall," with the need for "some real planning" to get ahead.

To view the full interview, watch the video above.

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