Do You Need $1.5M to Retire? 5 Experts Weigh In on the New Magic Number

By John Manganaro | Originally posted on ThinkAdvisor

Survey data published this week by Northwestern Mutual shows that Americans’ “magic number” for retirement has surged to an all-time high — rising much faster than the rate of inflation and swelling more than 50% since the onset of the pandemic.

According to the poll, Americans on average think they need to save $1.46 million to retire comfortably, a 15% increase over the $1.27 million reported last year. That jump far outpaces today’s inflation rate, which hovers between 2% and 3%. The magic number has jumped 53% from the $951,000 target that Americans reported in 2020.

Given the dramatic increase over just four years, ThinkAdvisor reached out to a stable of retirement experts to get their sense of what’s going on behind the numbers.

These retirement planning VIPs were asked what they make of the nearly $1.5 million figure and why it has grown so quickly. The experts also offered insights into what savers should keep in mind about “magic numbers” and other potentially misleading averages in overall retirement planning.

While each expert offered a distinct take on the survey data, they all agreed that savers are better off focusing on a holistic approach to income planning rather than pursuing a single magic number.