Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research may determine where and how companies appear. Learn more about how we make money.

Senior couple using digital tablet while sitting by dining table in living room
Money; Getty Images

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 are getting grimmer, according to financial services firm Northwestern Mutual’s latest research 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.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
If you’re searching for a hedge against inflation, Gold IRAs can make sure your hard-earned money is protected!
Gold IRAs help you protect your investments by providing the asset diversification and stability you need. Click on your state to get started.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
Invest in Gold

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 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.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Put a gold-backed IRA into your golden years
Gold IRAs function much like traditional retirement accounts, but your investment is backed with gold and other precious metals, including silver, platinum and palladium. Click below to get started.
Invest in Gold

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 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 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.

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 (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 in 42 years.

Both of those changes go into full effect in 2023.

More from Money:

The 401(k) Savings Rate Just Hit an All-Time High

Gen Z and Millennial Investors Want Crypto and Alts in Their 401(k)s

Many Gen Z Workers Plan on Retiring Early — With $2 Million in the Bank