This Is How Much New Yorkers Need in the Bank To Retire Comfortably

Inflation, it seems, has infiltrated every aspect of our lives, including the retirement plans of New Yorkers.

A recent study conducted by Northwestern Mutual has found that Americans now believe they need a staggering $1.46 million to retire comfortably. This represents a staggering 53% increase from the $951,000 target reported in 2020 and a 15% jump from last year's $1.27 million figure.

The study, titled the 2024 Planning & Progress Study, surveyed 4,588 adults in January to gauge their perceptions of retirement planning. Notably, while Americans are dreaming of bigger retirement nest eggs, they have not taken the actions needed to ramp up their savings.

The average amount Americans have saved for retirement dropped slightly from $89,300 in 2023 to $88,400. However, this is still over $10,000 below the peak of $98,800 recorded in 2021, leaving individuals with a substantial shortfall of $1.37 million between their retirement goals and actual savings.

According to Aditi Javeri Gokhale, Northwestern Mutual's Chief Strategy Officer, the widening gap between retirement goals and progress is concerning. She noted that inflation plays a significant role in pushing people's expectations for retirement savings to new heights. Faced with rising living costs and increased life expectancy, individuals are recalibrating their financial aspirations for their golden years.

Get our free mobile app

The study also reveals a consistent pattern across every generation. Each generation exhibits a sizable gap between their perceived retirement needs and the reality of their current savings. Here's a breakdown of the gap in savings between generations:

• Gen Z: Expects to need $1.63 million but has only saved $22,800 on average - a $1.61 million gap.
• Millennials: Believe they'll need $1.65 million but have only saved $62,600 on average - a $1.59 million gap.
• Gen X: Anticipates requiring $1.56 million but has, on average, saved $108,600 - a $1.45 million gap.
• Boomers: Predict they'll need $990,000 but have only saved $120,300 on average - an $870,000 gap.

Even higher-net-worth individuals say they need to save with their expectations of needing $3.93 million for retirement outweighing their average savings of $172,100.

One intriguing finding from the study was the contrasting savings tactics employed by different generations. Gen Z, the youngest cohort, stands out for recognizing the value of early retirement planning and wealth accumulation. These young adults began saving for retirement at an average age of 22, almost a decade before the overall average age of 31. Gen Z also expects to retire at the ripe age of 60, twelve years earlier than Boomers, four years earlier than Millennials, and seven years earlier than Gen X.

Interestingly, the study revealed that only 30% of Americans have a plan in place to minimize taxes on their retirement savings, despite the inevitable tax implications.