--- title: Americans Expect a Comfortable Retirement Will Now Cost Them $1.25 Million description: In a recent Northwestern Mutual survey, savers said they'll need $1.25 million to retire comfortably — a 20% increase from 2021. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 501 covers: - Retirement - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ published: '2022-10-26T18:22:25.000Z' modified: '2024-01-10T13:27:38.000Z' section: Retirement tags: - News word_count: 592 canonical: https://money.com/comfortable-retirement-cost-expectations/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Senior couple using digital tablet while sitting by dining table in living room](https://img.money.com/2022/10/News-Money-Needed-Comfortable-Retirement.jpg) Tumbling markets and soaring inflation are weighing on Americans’ retirement expectations, and the picture isn’t looking pretty. By almost all metrics, the country’s [plans for retirement](https://money.com/gen-x-cuts-all-spending-except-retirement/) are getting grimmer, according to financial services firm Northwestern Mutual’s [latest research](https://news.northwesternmutual.com/planning-and-progress-study-2022) on retirement planning. Chief among the findings — which were released Tuesday — is that savers say they now believe they’ll need a whopping $1.25 million in order to retire comfortably. That amounts to a 20% increase from 2021 and a 32% increase from February 2020 (which was pre-pandemic). “It’s a period of uncertainty for many people, driven largely by rising inflation and volatility in the markets,” Christian Mitchell, executive vice president at Northwestern Mutual, said in a [news release](https://news.northwesternmutual.com/2022-10-25-Northwestern-Mutual-Study-Finds-Americans-Now-Believe-They-Will-Need-1-25-Million-for-Comfortable-Retirement). ## How much money do you need to retire? Retirement can be expensive. Major costs include health care, housing, utilities and food — and that's just for the basics. In Northwestern Mutual's poll, 52% of respondents said they didn't know how much they needed to retire comfortably. Some 17% said they anticipated needing at least $1 million. (Of all respondents, the average amount needed to retire comfortably came out to $1.25 million.) The [exact amount needed for retirement](https://money.com/save-for-retirement/) is largely case by case, but some experts suggest savers should tuck away about 10 times their annual income by the time they retire or set aside 15% of their salaries each year. While Americans are expecting they’ll need to save eye-popping sums of money to retire, the actual amount that they’re stashing away has plummeted. Northwestern Mutual says the average nest egg for U.S. adults is now $86,869 — down 11% from $98,800 last year. This savings conundrum has many folks losing confidence in retirement and postponing the age they bid the workplace farewell. Northwestern’s survey shows 43% of respondents say they don’t feel financially prepared for retirement, contributing to a rise in the average age they expect to retire: now 64. Last year, it was 62.6. Northwestern’s findings are no blip. The report, based on a survey conducted in February of nearly 2,400 adults, comes after a bevy of recent research that suggests deep cracks are forming in many Americans' plans to retire. A recent report from financial firm Schwab shows that savers say [inflation is the No. 1 obstacle](https://money.com/inflation-obstacle-retirement/) between them and a comfortable retirement. Similarly, research from the Nationwide Retirement Institute found that 4 in 10 workers who were 45 or older expect to [push back their retirement age](https://money.com/40-percent-older-americans-delay-retirement-inflation-effect-on-younger-workers/) in hopes of stretching their dollars a little further. Inflation, which has stubbornly stuck near four-decade highs throughout 2022, is playing a key role in these doom-and-gloom reports. Rising prices not only limit how much money people can save now, but they can also drastically increase how much retirees spend later down the road — especially when it comes to [big-ticket expenses like health care](https://money.com/healthcare-costs-retirement-fidelity-study-2022/). The silver lining? Inflation is taken into account by the IRS and the Social Security Administration to help retirees and savers alike. On Friday, the IRS announced a major bump to the [amount savers can contribute to their 401(k)s](https://money.com/401k-ira-contribution-limits-2023/) (and similar employee retirement accounts) from $20,500 to $22,500, a boost of nearly 10%. Likewise, inflated prices also led to the largest cost-of-living [increase to Social Security checks](https://money.com/social-security-checks-cola-increase-2023/?ref=/401k-ira-contribution-limits-2023/) in 42 years. 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