Northwestern Mutual’s 2024 Planning and Progress Study found that the average American’s “magic nest egg number” to achieve a comfortable retirement is $1.46 million (up 15% from $1.27M just last year and more than 50% since 2020).
Is this number in any way meaningful for your specific situation? No.
Every retirement is different. Some will be able to get by with a smaller nest egg than $1.46 million, but many will need much, much more than that to fund their desired lifestyle for 30 years in retirement.
In more than 20 years of helping clients prepare for retirement, we have two observations:
- Before running the numbers, most people greatly underestimate the amount of money they will need to fund their desired lifestyle in retirement!
- People who plan carefully and prepare thoroughly for retirement live with more joy and less stress in retirement than those who just wing it and hope (pray) not to run out of money.
Retirement and Retirement Planning are Fraught with Uncertainty
The whole process of planning for retirement is fraught with unknowable uncertainties, starting with, most importantly . . . how long are you (and perhaps your spouse) going to live? Will you require extensive medical care or assisted living? If so, when? How much will it cost? What will your tax rate be in the future, and the rate of return on your nest egg? How much will inflation bite?
Planning will not make these uncertainties go away, but those who take time to plan can make reasonable base-case assumptions and enter retirement with confidence.
If you would like to find out how prepared you are to live the retirement you want, please contact us to set up a complimentary consultation. You can email us at [email protected] or call 619-319-0520.
