Here's how much money Americans say they need to retire. $1 million isn't enough.

By Jessica Hall

Inflation, fears about AI's impact on jobs, and increased longevity have pushed expectations higher for the 'magic number'

Americans' "magic number" - the amount of money they think they'll need for a comfortable retirement - has jumped thanks in part to fears about AI's impact on jobs, per a new study by Northwestern Mutual.

The "magic number" Americans believe they will need to retire comfortably climbed to $1.46 million in 2026 - $200,000 more than last year - as inflation, increased longevity and fears about the impact of artificial intelligence on jobs have raised financial anxiety.

According to a new study by Northwestern Mutual, Americans' heightened expectations for how much they'll need for retirement come as actual retirement savings remain a fraction of that goal for many. Indeed, 46% of Americans said they don't expect to be financially prepared for retirement, per the study.

"The new 'magic number' reflects a convergence of factors - from persistent inflation and longer life expectancies, to uncertainty about the future of Social Security," said John Roberts, chief field officer at Northwestern Mutual. "Retirement is increasingly complex, and Americans are responding by setting higher expectations for what they'll need."

Roberts admits that the "magic number" of $1.46 million is more of a hunch or perception of what people think they'll need, rather than an official financial calculation. Following the number from year to year, however, provides an interesting gauge of how people feel about their retirement security, he noted.

"There are tailwinds to that number. And people are worried about the impact of AI on their career, as well as geopolitical uncertainties in the past year. The fears of rising interest rates - there's a lot of pressure on the consumer," Roberts said.

Read: $1 million saved for retirement 'ain't what it used to be': American workers still have a long way to go

One-third of Americans are somewhat or extremely pessimistic about the potential impact of AI on their careers. For Generation Z, or those born between 1997 and 2012, it's nearly half at 46%, Northwestern Mutual said.

American millionaires - people with more than $1 million in investable assets - have higher expectations for retirement income and savings. High-net-worth Americans believe they will need to save at least $2.67 million, on average, in order to retire comfortably, Northwestern Mutual found.

The study comes as Americans are living longer and more than 10,000 people are turning 65 every day through 2027, in a demographic bubble known as "Peak 65." As part of retirement planning, healthcare expenses continue to rise; a 65-year-old retiring in 2025 could expect to spend an average of $172,500 on healthcare expenses throughout their retirement, according to Fidelity Investments.

"There's a widening gap between what people have versus what they need," Roberts said. "There's an epidemic of financial anxiety."

American workers' actual retirement savings pale in comparison to the $1.46 million goal. The median amount American workers have saved for retirement is only $955 when including people who have nothing saved at all, a recent report from the National Institute on Retirement Security found. Among workers who have at least some retirement savings, the median figure is $40,000.

Read: 'It's not a sign that it's going well.' The median amount American workers have saved for retirement is $955.

The gap between how much money Americans have actually saved and how much they'll need in retirement means people may need to keep working for longer or change their beliefs about what a comfortable retirement looks like, according to Roberts. There's also a risk of a higher rate of elder poverty if people are unable to save what's required, he said.

Workers also face uncertainty in how much Social Security they will get. The program is facing insolvency in six years if Congress doesn't act to shore up its finances. In 2032, Social Security faces automatic benefit cuts of 24% unless changes are made. The average Social Security check was $2,076 a month as of February 2026, according to the Social Security Administration.

Read: Six years away from Social Security's insolvency and lawmakers still can't agree on how to fix it

While everyone's retirement goal will vary based on individual circumstances such as where they'll live and what lifestyle they want in retirement, Northwestern Mutual recommended that people should aim to replace around 80% of their preretirement income.

Nearly half (48%) of Americans think it's somewhat or very likely they will outlive their savings. This concern is greatest among millennials (55%) and Gen X-ers (50%). Despite this fear, more than one-third of Americans (36%) say they have not taken any steps to address this possibility, the Northwestern Mutual study found. Millennials are those born between 1981 and 1996.; Gen X-ers are those born between 1965 and 1980.

"It may seem like a massive number at $1.46 million, but on the other hand, it may not be enough," Roberts said. "People have this idea that they will spend less in retirement - that they'll be more frugal - but that's not always the case."

Using a financial benchmark such as the 4% rule can help people determine how much they'll have to spend in retirement without running out of money. The 4% rule suggests that an individual may withdraw 4% of their retirement savings in the first year and withdraw the same amount, adjusted for inflation, for about the next 30 years. A nest egg of $1.46 million would produce about $58,000 in annual retirement income, Northwestern Mutual said.

Among preretirees, or those ages 45 years or older, 55% expect to spend less per month in retirement than they do today. About a third expect to spend the same, while 11% expect to spend more. High-net-worth individuals are more likely to expect their spending to remain the same in retirement (48%) rather than decline (38%).

"These rules of thumb can certainly give Americans a ballpark estimate for their own wealth-management goals," said Roberts. "But they don't factor in the big risks to retirement - like increasing healthcare costs or a long-term-care event. ... These blind spots can leave people vulnerable."

-Jessica Hall

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04-01-26 0900ET