Americans Set a New Retirement Savings Target for 2026
Every year, Northwestern Mutual conducts a Planning and Progress Study. Their website states this study explores attitudes and behaviors toward money, financial decision-making, and the broader issues impacting people’s long-term financial security.
The headline of this annual study is the result of asking Americans – “How much do you need to retire comfortably?” The magic number in 2026, is $1.46 million. That’s up by $200,000 from last year’s study. But, it’s about the same as the 2024 study.
How Many Millionaires Are There in the U.S.? More Than You Think
Becoming a millionaire is a huge accomplishment. It is more common than it used to be, but it’s still pretty elite company. According to a Yahoo Finance article, there are about 25 million millionaires in the United States. That is drawing close to 10% of the population. The article estimates there are about 1-thousand Americans becoming millionaires every day.
Why Being a Millionaire Doesn’t Mean You’re Financially Independent
While becoming a millionaire is a major milestone in your path to financial independence, it may not be the magic number indicating you’ve achieved financial independence.
Where You Keep Your Money Matters More Than How Much You Have
First, where you have your $1 million is important. Financial independence is having enough assets to create enough income, that when added to your other income sources, is enough to sustain your lifestyle, and be prepared for the unexpected, for the rest of your life. Pew Research estimates that 60% to 70% of the typical Americans’ net worth is in their primary residence. You can’t spend your home equity, unless you borrow against it or sell your home.
How Inflation Erodes Your Retirement Savings Over Time
Second, $1 million is not what it once was. Inflation consistently erodes your buying power. The average inflation rate in the United States is between 3% and 4%. Go Banking Rates estimates that you would need more than $2 million today to buy what $1 million could 30 years ago.
Why Your Retirement Number Is Different From Everyone Else’s
And finally, your million is not the same as someone else’s million. Retirement is an income problem. You have to have enough income to support your lifestyle. Your income need will be different than someone else’s.
Your total income makes a huge difference too. A couple that has two pensions and two Social Security checks will likely need significantly less assets, than a couple who has no pension, and one spouse worked, while the other did not, and consequently will not have much from Social Security.
Stop Chasing a Magic Retirement Number — Find Your Own
Bottom line is – there is NO magic number. But, you can find your number, through financial planning with an advisor.
Securities are offered through LPL Financial, Member FINRA/SIPC. GenWealth Financial Advisors is an other business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.
