Tuesday, November 22, 2022
In February, 2,381 American adults were surveyed by Northwestern Mutual on what amount is needed for their household to retire. The average answer was $1.25 million, a 20% jump from a year ago. However, the average retirement savings account contains $86,869, showing an 11% decline from last year.
Christian Mitchell, chief customer officer at Northwestern Mutual, points to volatility in financial markets and rising inflation. The federal government has increased Social Security checks by 8.7% for 2023 in an attempt to mitigate the pain for retirees and investors. The IRS has also made inflation adjustments for 401(k) savings accounts, increasing contribution limits.
Another contributing factor is the Covid-19 pandemic. Approximately one in four people say they have shifted their plans to retire later due to the impacts of the pandemic. Of those who said they will be delaying retirement, 59% said they hope to save more money, while another 45% said they were concerned about the rising healthcare costs.
For more information see Joseph De Avila “A New Survey Reveals Americans’ Magic Number for Retirement”, The Wall Street Journal, October 26, 2022.
Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.