Do you actually need $1.46 million to retire comfortably?

The formula for how much to squirrel away for retirement is tricky and loaded with lots of variables.

Up until retirement, most of what you budget for in life is pretty straightforward. You can set up savings goals to put a certain percentage down on a new home purchase. You might have a fraction of your income filtering into a 529 college savings plan for your kids’ education, or a preset number of dollars rerouted to savings to pay for a vacation.

But the formula for how much to squirrel away for retirement is tricky and loaded with lots of variables. What will your lifestyle be like? How much will inflation be? And, for millennials and younger generations, there’s the looming question of what Social Security benefits of the future will look like if reserves run dry in the next decade.

So, how much money do you need to have saved for retirement? That’s the million-dollar question — which most Americans believe will actually cost them more than a cool million, according to a new study from Northwestern Mutual. The financial services company found that Americans think they’ll need $1.46 million saved in order to retire comfortably. This figure is an all-time high, and up from $1.27 million when Northwestern Mutual did a similar survey last year. In 2020, survey respondents thought having $951,000 stashed away for retirement would provide a good enough cushion.

The study, which involved surveying 4,588 U.S. adults in January 2024, also found that Americans across the board have an average of $88,400 saved for retirement.

“People’s ‘magic number’ to retire comfortably has exploded to an all-time high, and the gap between their goals and progress has never been wider,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual, in a press release. “Inflation is expanding our expectations for retirement savings, and putting the pressure on to plan and stay disciplined.”