There is no ‘magic’ retirement number

For a different publication, Alicia is looking to speak with people who have decided being a freelancer/contract worker/entrepreneur is a “safer” career route than working a corporate job. If this is you and you would like to talk with her/get more details, reach out to alicia@thepurse.co!

If you have read any kind of retirement article, chances are you have encountered the $1 million retirement savings target. That has long been a lofty but memorable goal highlighted on magazine covers and financial services websites.

The “magic” retirement number recently increased. Americans say they need $1.46 million per person socked away to retire comfortably, according to Northwestern Mutual’s 2026 Planning & Progress Study. That’s up $200,000 from last year’s survey. For wealthy Americans who already have more than $1 million in investable assets, the savings goal ticks up to $2.67 million, on average.

I have seen a lot of outrage about this new figure circulating online. In fact, I filmed a TikTok on the topic, and many of the comments were negative, even hostile. “Stats like this are incomplete to the point of being obsolete,” wrote one viewer. “Lol comfortably retire. Good one,” wrote another.

@aliciatalksmoney
4/3/2026: Do you have a retirement savings goal? #economy #retirement #savings
♬ original sound - Alicia Adamczyk

How much you need to save in order to retire comfortably is, of course, completely dependent on your individual circumstances and lifestyle. Your medical needs, housing costs, travel aspirations, dependents, other income streams (like Social Security and/or a pension), expenses, longevity, and so on, all affect what your number is. There is no single “magic” number that will work for every single person alive. And many people do not have the luxury of saving much on their own, at all.

One worry among financial professionals (and this financial reporter) is that people will see these seemingly high numbers parroted in the media and feel shame about where they fall financially, even if their current savings level is actually completely appropriate for their age, income, and expected retirement lifestyle.

“‘Magic number’ headlines can unintentionally discourage people from engaging with retirement planning, because the number itself can sound really daunting,” says Tyler End, a certified financial planner and CEO and cofounder of Retirable. “Financial planning is personalized to each individual. Million-dollar numbers might seem unfathomable to people and give them a feeling of hopelessness, especially if they have lower financial literacy.”

And in fact, very few Americans will save anywhere near $1.46 million. The median household retirement balance for those at retirement age is just $200,000, according to the Federal Reserve Survey of Consumer Finances (the average is $609,230).

But Northwestern Mutual is not suggesting that every single person needs to have $1.46 million in the bank. Rather, it is taking the public’s general temperature on retirement readiness. The same survey also found that 46% of respondents don’t expect to be financially prepared for retirement, while 48% believe it is likely they will outlive their savings.

“While there is no universal retirement number for everyone, Northwestern Mutual generally recommends that people aim to replace around 80% of their pre-retirement income,” the report reads.

And while $1.46 million may seem random, it is not really surprising that the amount of money people think they need to comfortably retire has ticked up fairly significantly over the past year, considering that inflation and affordability are huge pain points for most. Paying more for everything can make us all feel like we are falling behind on our other goals, that we are being priced out of our own lives.

In March, I wrote about a record high share of Americans taking emergency hardship withdrawals from their workplace retirement accounts. Despite the fact that we didn’t send it out as a newsletter—it is only published to our site—it is still one of The Purse’s most-viewed stories to date. So many of us are really, really concerned about our ability to save and not stress about money when we are old.

As long as I have been a personal finance reporter, I have pushed back against the financial rules of thumb that proliferate in the space. (Even though Lindsey will confirm that readers love to hate-read those pieces.) Whether it’s “don’t spend $5 on takeaway coffee,” “housing should account for no more than 30% of your monthly budget,” or “aim to have one year’s worth of your salary saved by age 30,” what works for everyone can rarely be summed up in a sentence or two.

Over the past few months, though, I’ve found myself changing my tune slightly. It actually is useful to have some general personal finance guidelines, especially for something as massive as saving for retirement. It can help you cut through the noise, offer you a specific goal, and encourage you to get started on your personal finance journey, which is often the most difficult part.

As you learn more, you can begin to tweak your own personal set of rules and define your own savings, spending, and investment parameters. Nuance is important, of course, but at the end of the day it can be far more useful to have a concrete number in mind, with the understanding that it may (will) change with time.

When it comes to calculating how much you would like to have saved for retirement, there are countless ways to go about it. You could meet with a financial advisor for a truly personalized approach or sit down yourself to try to figure out exactly how much you think you would need. If that sounds too daunting—or impossible—well, that’s when the rules of thumb can be a great starting point. Here are a few of the most popular:

The 25x rule: Save around 25 times your expected annual spending. If you used that $1.46 million figure, you’d be able to spend around $58,000 annually.
The $1,000-a-month rule: For every $1,000 of desired monthly retirement spending, save $300,000. Using the $1.46 million, you would be able to spend around $4,800 per month.
The 4% rule: A classic rule, this one stipulates you can withdraw 4% of your retirement savings in your first year of retirement, and then withdraw the same amount (adjusted for inflation) for about the next 30 years. With $1.46 million, you can spend around $58,000 the first year. I wrote about this rule over on Money Moves last week.
The reverse 4% rule: Consider how much you’d like to spend annually in retirement and multiply it by 0.04. The result is your retirement savings target. So if you’d like to spend $60,000 per year, divide that by 0.04 to end up with $1.5 million. That’s your new goal.

I also appreciated this suggestion from Northwestern Mutual: When you are just starting on your retirement savings journey, and having anything near $1.46 million seems crazy, aim to save 15% of your salary (including any employer match you might receive). It is unlikely you will be able to do it at first, or maybe ever, especially if you don’t earn a ton. In that case, save as much as you can, even if it is 1%. Then, slowly increase it over time.

It’s really important to just get some money in an investment account, so compound interest can do the hard work for you. In fact, that is what I think a lot of the angry conversations around the magic number are missing. Assuming investment gains, you do not have to save $1.46 million of your own wages; compounding can make significant headway.

And it is worth noting that none of the above accounts for what you might receive from Social Security, pensions, or any other type of savings (CDs, real estate, bonds, annuities, etc.). Depending on how you look at it, that could be a good or a bad thing. Good, because it means you will have a little more in retirement than you might think. Bad, because you might be unnecessarily stressed out.

There are asterisks with pretty much anything in life, and how much to save for retirement is no exception. That said, I don’t see a problem with using something like $1.46 million as a jumping-off point to figuring out your own “magic” number. If nothing else, it got us talking, right?

-Alicia

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Retirement savings in the news

More on a “magic” number: “The aim shouldn’t be to attain a certain level of wealth by a specific date, but to assure yourself of a steady level of income throughout your retirement,” writes Bloomberg’s Allison Schrager. “These are fundamentally different objectives, and they require a different investment strategy and mindset from the start.”
The Wall Street Journal published a kind of random but related takedown of the 4% rule last month.
Each year, Morningstar recalculates what a safe withdrawal rate is, incorporating forward-looking asset-class return (as opposed to historical returns, which is what the 4% rule is based on) and inflation assumptions. This year, it is 3.9%. That said, if you are okay with some fluctuations in your spending, the researchers estimate you could feasibly spend up to 6% of your nest egg in a year and be okay.
Speaking of Social Security, friend of The Purse Kathryn Anne Edwards wrote about how to strengthen the program for gig workers (an ever-growing portion of our workforce).
The shift from employer-funded pension plans to employee-funded 401(k)s puts the onus on us to make sure we have enough in our golden years. And the quality of your employer 401(k) can have a huge impact on how much you can save. There are lots of rules in place that require employers to have their employees’ best financial interest in mind. But you won’t be surprised to learn that the Trump administration is trying to weaken these rules, ProPublica reported this week. Related: I wrote about the problem with private equity in 401(k)s earlier this year.
I didn’t get into it in this essay (though a related story is on our future publishing schedule!) but another important consideration is where you are saving all of your money for retirement. Ideally, you will have some in a taxable account (like a brokerage), a tax-deferred account (like a 401(k) or traditional IRA), and a tax-free account (like a Roth or health savings account). More to come on this!
You know we love personal stories that dive into money topics. The Wall Street Journal regularly interviews retirees about their experiences. And we recently ran a roundup of how much women of different ages have saved across all their accounts (pulled from published editions of Home Economics). We’d love to do more on the topic of retirement. If you have thoughts or want to share your story, let us know!

What else we’re reading (and watching and listening to)

I love whenever Taffy Brodesser-Akner’s writing shows up in The New York Times, and this piece on cold-plunging didn’t disappoint. The comment section is also entertaining. -Lindsey
This essay by Alfred Jung Lee on “descriptions” and what they tell us about what or whom we are describing is really lovely. -Alicia
Bridget Read’s deep dive into data privacy and internet hackers is stressful and fascinating. I haven’t thought about the Sony hack in years—proof how short our memories are about these kinds of things. I try to always remember not to send an email, Slack, or text that I wouldn’t want splashed across the front of The New York Times. (Speaking of data privacy: Here’s advice on how to prevent Meta from using your Instagram photos in its new A.I. generator.) -Lindsey
My friend Caitlin wrote this interesting story on what it’s like for an actor to finance their own Emmy campaign. Apparently it’s $225 to submit yourself, which seems reasonable. But the cost of actually campaigning is a whole other ballgame. -Alicia (I loved this! -Lindsey)

What’s on our radar

Ken’s band, Be Decent, released the debut single off their new record. It includes vocals from indie legend Ted Leo and keyboard stylings from Freddy, and I’m very excited and proud! -Lindsey
I wrote about PlayStation ending physical game disc development and what the general demise of physical media means for consumers over on Money Moves. (TL;DR: it turns all of us into lessees, rather than owners. And that means we have fewer consumer rights while still paying ownership prices.) -Alicia

Comment of the week

“Great tips! Along with #1 [“Check your savings rate”], I actually looked to see how much money we actually saved so far this year (I had just tracked annually). For me I wanted to make sure we were on track for our annual goal and if we weren’t then we had time to make tweaks.”

-Courtney on “10 to dos for a 2026 mid-year check in”

TikTok of the week

@aliciatalksmoney
7/2/2026: The US job market is stuck. #economy #jobs #career
♬ original sound - Alicia Adamczyk

What else we’ve published on The Purse this week

We’re halfway through 2026—now is a good time to recommit to some financial goals.

There’s a lively conversation going on in the comments of this week’s Question of the Week!

Author Jo Piazza and her husband, Nick, give us a peek into their very busy lives running a media company and raising three kids.

Don’t miss this advice from a financial advisor on handling inheritance when you’re married.

Best money we spent this week

I got drinks with a friend that turned into a late-night Van Leeuwen run, and it was extremely necessary in this heat! (I always get the honeycomb flavor but decided to try the peanut butter brownie honeycomb this time and…didn’t love it!) -Alicia
We went to the Cyclones game on Tuesday night, and it was so much fun! It was “take your dog to the ballpark,” and while I’m not the biggest pet person, they were pretty cute. (The worst money I spent, if anyone cares, is $33 for three milkshakes at a Mr. Softee parked outside of Prospect Park. I wouldn’t have cared as much about the expense if they actually tasted good, but they were more milk than ice cream!) -Lindsey

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