While U.S. workers believe they’ll need roughly $1.27 million in savings to retire comfortably, employees have, on average, just $89,300 in retirement savings, according to a new survey by Northwestern Mutual.
The survey, which polled more than 2,700 employees, found 52 per cent said they expect to be financially prepared for retirement when the time comes, a percentage that increases among generation Z (65 per cent) and millennials (54 per cent) and decreases among generation X (45 per cent).
However, while respondents indicated there’s a 45 per cent chance they’ll outlive their savings, a third (33 per cent) said they haven’t take any steps to ensure they’ll have enough money.
Workers said, on average, they plan to work until age 65, up from age 64 in 2022 and in 2021. Among different generations of employees, baby boomers said they expect to work until age 71, followed by gen X (age 65), millennials (age 63) and gen Z (age 60).
“Americans’ magic number for retirement readiness continues to rise,” said Aditi Javeri Gokhale, president of retail investments and head of institutional investments at Northwestern Mutual, in a press release. “The good news is they are saving and investing more for tomorrow, even in this time of high inflation and market volatility. That is a step in the right direction and a reverse of what we saw last year when the gap widened rather than narrowed. The challenging news is that there continues to be a big disparity between what they think they’ll need to retire and what they’ve saved to date.”