Three is a magic number, as the Schoolhouse Rock song goes. So, it turns out, is $1.46 million.
That’s how much the average American thinks a comfortable retirement will cost, according to Northwestern Mutual’s 2026 Planning and Progress study. The “magic number” is up more than $200,000 from last year, attributable to persistent inflation, longevity gains and worries about Social Security. Many don’t expect to hit this ambitious target, but what matters more than any one number is pairing clients’ expectations with a comprehensive financial plan that addresses their unique goals.
“I get the attraction to a nice big round number,” said David Blanchett, head of retirement research at Prudential Financial. “But there are going to be some retirees that need a fraction of that target and some that need a significant multiple.”
Big Goals, Big Challenges
Retirement planning is increasingly complex, said John Roberts, chief field officer at Northwestern Mutual, and Americans are responding by setting higher expectations for what they’ll need. At the same time, many are worried about achieving their goals:
- Nearly half (46%) of all Americans don’t expect to be financially prepared for retirement.
- A similar proportion (48%) believes it is somewhat or very likely they will outlive their savings, an expectation shared by 55% of millennials, 50% of Gen Xers and just 40% of baby boomers.
People with more than $1 million in investable assets have even higher expectations for retirement income and savings, Roberts noted. That group believes they will need to save at least $2.67 million, on average, in order to retire comfortably, a pattern also seen in Prudential’s research.
“I see the same effect in our data, where the median required target savings increases among those who have more assets,” Blanchett said. “These are people who need to have more savings because they have higher incomes. The reason people who have saved more think they need to save more is probably because they do.”
The Advisor Effect. Americans with a financial advisor say they plan to retire at age 63.7, on average, roughly 2.5 years sooner than Americans without an advisor (age 66.1). Moreover, nearly three in four Americans with an advisor (74%) believe they will be financially prepared for retirement when the time comes. Just 43% of Americans without an advisor agree.
“These figures paint a picture of retirement that may stretch 30 to 40 years or longer,” Roberts said. “Planning for longevity isn’t just about accumulating more. It’s about building a strategy that can sustain income, manage risk and adapt over time.”
Blanchett agreed, adding that rules of thumb related to withdrawal rates can also be a useful guide. “For example, you can spend 5% of your portfolio in the first year of retirement. That’s somewhat agnostic to the level of savings. I would rather people think about how much they want to spend, subtract out Social Security or other forms of income, and then multiply that remaining deficit by 20.”
Through this exercise, a lot of people will figure out they need a lot less, and others a lot more.
