By John F. Davenport, Esq. | Davenport & Associates, Norwalk, CT | April 9th, 2026
Northwestern Mutual just released their 2026 Planning & Progress Study, and the headline number is getting a lot of attention: Americans now believe they need $1.46 million to retire comfortably. That is up more than 15 percent from last year and $200,000 higher than 2025.
If you saw that number and felt a knot in your stomach, you are not alone. Nearly half of Americans (46 percent) say they do not expect to be financially prepared for retirement. And 48 percent believe they will outlive their savings.
But here is the truth that the headlines will not tell you: there is no universal retirement number. The $1.46 million figure is a survey average, not a financial plan. Some people will need more. Many will need less. What matters is not the number on a magazine cover. What matters is whether your money, your income sources, and your plan are aligned with the life you actually want to live.
I have been helping families plan for retirement for over 30 years. The single biggest mistake I see is people chasing a number instead of building a strategy. Let me walk you through what actually determines how much you need, and how to figure out your real number.
The 2026 Planning & Progress Study surveyed 4,375 U.S. adults in January 2026. The key findings go well beyond the headline number.
The average American started saving for retirement at age 31 and plans to retire at 65. That gives them roughly 34 years to build their nest egg. Gen Z started earlier, at 22, and plans to retire at 61. Gen X started later, at 32, and is targeting 67.
Here is where it gets concerning: 23 percent of people with retirement savings say they have one year or less of their current annual income set aside. Among Gen X, the generation closest to retirement, 26 percent have not started saving at all.
The study also found that 41 percent of Americans plan to work during retirement. For Millennials and Gen X, that number jumps to 50 percent. The top reason is not financial. Fifty-six percent say they want to continue feeling useful and stimulated. But 47 percent admit they will need the additional income just to afford retirement.
| Key Takeaway The $1.46 million is an average expectation, not a recommendation. High-net-worth respondents said they would need $2.67 million. The median American household has $87,000 saved for retirement. These numbers tell you more about anxiety than they do about planning. |
Financial media loves a clean number because it makes a great headline. But retirement planning does not work that way. Your actual need depends on at least five factors that are different for every person and every household.
A general guideline is to plan on replacing about 80 percent of your pre-retirement income. If you earn $80,000 a year, that means roughly $64,000 in annual retirement income. If you earn $200,000, the target is closer to $160,000. The $1.46 million number does not account for these differences.
The average Social Security retirement benefit in 2026 is approximately $1,976 per month, or about $23,712 per year. If you delay claiming until age 70, that number grows significantly thanks to delayed retirement credits of 8 percent per year. For a married couple, combined benefits can cover a substantial portion of basic living expenses. Every dollar Social Security covers is a dollar your savings do not have to provide.
Not everyone spends the same amount in retirement. Some people downsize, pay off their mortgage, and live modestly. Others travel extensively in their 60s, then slow down in their 70s. Healthcare costs tend to rise later. A retirement plan has to model these phases, not just assume a flat number for 30 years.
Pensions, rental income, part-time work, annuity payments, and even inheritance can all reduce the amount you need from savings. The study found that 41 percent of Americans plan to work in retirement. If that is part of your plan, your savings target changes.
Retiring at 62 instead of 67 means five more years of drawing down savings and five fewer years of contributions. Americans increasingly expect to live longer. Twenty-seven percent believe they will live to 100. The math changes dramatically when your money needs to last 35 years instead of 20.
| Not Sure If Your Retirement Savings Are on Track? John F. Davenport, Esq. and Davenport & Associates helps CT and NY families locally as well as people all across the country build retirement income strategies based on their actual numbers, not headlines. Click below to schedule your free 30-minute consultation. -> Schedule a Free Review -> jdavenportassociates.com/contact-us |
You have probably heard these before. Here is how they work when applied to the $1.46 million figure.
This guideline suggests withdrawing 4 percent of your savings in the first year of retirement, then adjusting for inflation each year after that. Applied to $1.46 million, that gives you roughly $58,400 per year. Add Social Security and you might be in the range of $80,000 to $85,000 in total annual income. For some households, that works. For others, it falls short.
This is the inverse of the 4 Percent Rule. Take your expected annual retirement spending and multiply by 25. If you need $60,000 per year from savings (after Social Security), your target is $1.5 million. If you only need $40,000 from savings, the target drops to $1 million.
For every $1,000 of monthly retirement income you want from savings, you need about $300,000 saved. At $1.46 million, that translates to roughly $4,800 per month, or $57,600 per year.
| The Problem with Rules of Thumb These formulas do not account for sequence-of-returns risk, inflation spikes, healthcare costs, long-term care expenses, or tax implications of withdrawals from different account types. They are starting points, not strategies. |
The gap between what people think they need and what they have actually saved is significant. According to the Federal Reserve Survey of Consumer Finances, the median retirement savings for American families is $87,000. For households aged 55 to 64, the median is $185,000. For those 65 to 74, the median is $200,000.
Compare that to the $1.46 million target and you can see why nearly half of Americans fear outliving their savings.
But here is the context that changes the picture: most of these households will also receive Social Security. Many have home equity. Some have pensions. The median savings number alone does not tell the full story of retirement readiness.
What it does tell you is that most Americans need a plan, not just a number.
One of the most striking findings in the Northwestern Mutual study is the difference between people who work with a financial advisor and those who do not.
Americans with a financial advisor plan to retire at 63.7, nearly two and a half years earlier than those without an advisor, who target 66.1. And 74 percent of people with an advisor believe they will be financially prepared for retirement. Only 43 percent of those without an advisor feel the same way.
The gap extends across every planning area the study measured. People with advisors are far more likely to say they understand how inflation, taxes, and market drops could affect their retirement. They are more likely to have a plan for healthcare costs, long-term care, and Social Security timing.
This is not a coincidence. A financial advisor does not just help you pick investments. The real value is in building a comprehensive strategy that coordinates your income sources, manages your tax exposure, and adjusts as your life changes.
Forget the headlines. Here is a straightforward framework for figuring out what you personally need.
Start with your current spending and subtract the expenses that will go away in retirement (commuting, payroll taxes, retirement contributions). Add the expenses that will increase (healthcare, travel, hobbies). Be honest about the lifestyle you want.
Add up your Social Security benefit (get your estimate at ssa.gov), any pension income, and any annuity payments. This is your income floor, the money that comes in regardless of what the market does.
Subtract your guaranteed income from your target spending. The difference is what your savings need to cover each year.
Take that annual gap and multiply by 25. That gives you a rough savings target. If you plan to retire before 65 or expect to live past 90, multiply by 28 or 30 instead.
What happens if the market drops 30 percent in your first year of retirement? What if you need long-term care? What if inflation runs hot for a decade? A good financial plan accounts for these scenarios. A number on a napkin does not.
These are the questions I hear most consistently from families planning for retirement.
| Q: Can I retire with less than $1 million? Yes. If your Social Security benefit is strong, your spending is modest, and your home is paid off, many people retire comfortably with $500,000 to $800,000 in savings. The key is matching your income to your expenses, not hitting an arbitrary benchmark. |
| Q: What if I am behind on savings? If you are 50 or older, catch-up contributions let you put an extra $8,000 per year into your 401(k) (for a total of $32,500 in 2026) and an extra $1,100 into an IRA (for a total of $8,600). Delaying Social Security, working a few extra years, or downsizing your home can also close the gap. Small changes at this stage have an outsized impact. |
| Q: Should I claim Social Security at 62 or wait? Claiming at 62 permanently reduces your benefit. Waiting until 70 increases it by roughly 77 percent compared to the age 62 amount. For married couples, the timing decision is especially important because it affects survivor benefits. There is no one-size-fits-all answer, but for most healthy retirees, waiting pays off. |
| Q: How much should I have saved by age 60? Common guidelines suggest 8 to 10 times your annual salary by age 60. If you earn $100,000, that means $800,000 to $1 million. But again, the real answer depends on your spending, your income sources, and when you plan to retire. |
| Q: Is $1.46 million enough for a couple? It depends entirely on their combined spending and income. A couple with two Social Security benefits totaling $50,000 per year and modest spending can make $1.46 million last well past 30 years. A couple spending $150,000 per year with one Social Security benefit will burn through it much faster. |
| Q: Does having a financial advisor really make a difference? The data says yes. According to the Northwestern Mutual 2026 study, 74 percent of people with a financial advisor believe they will be financially prepared for retirement versus 43 percent of those without one. People with advisors also plan to retire nearly 2.5 years earlier. The value is not just investment selection; it is comprehensive planning, tax strategy, and accountability. |
The $1.46 million headline is interesting, but it is not your number. Your number comes from your spending, your income sources, your health, your goals, and your willingness to plan.
The most important takeaway from the Northwestern Mutual study is not the dollar figure. It is this: people who work with a financial advisor are dramatically more confident, more prepared, and more likely to retire on their own terms. That is not because advisors have a magic formula. It is because they help you build a real plan and adjust it as life happens.
If you do not know your number, or if you are relying on a rule of thumb you read online, it is time to get serious. A 30-minute conversation with a qualified advisor from Davenport & Associates can give you more clarity than years of worrying about a headline.
| Questions About Your Retirement Number or Your Savings Strategy? Book a free 30-minute call with the Davenport & Associate team. We locally help CT and NY families, as well as people from across the country calculate their real retirement number, build tax-efficient withdrawal strategies, and coordinate Social Security timing with their overall financial plan. -> Schedule Your Free Review -> jdavenportassociates.com/contact-us |
| About the Author | John F. Davenport, Esq. John F. Davenport holds a law degree from Pace University, an MBA in finance from Fordham University and undergraduate degree from the University of Notre Dame. He is a licensed attorney in New York and Connecticut, and a financial advisor. He founded Davenport & Associates in 1997 and has spent more than 30 years helping CT and NY locally and families across the country build retirement income plans and estate strategies that work together, not against each other. Davenport & Associates is located at 800 Connecticut Avenue, Suite E401, Norwalk, CT 06854. Phone: (203) 853-6300 | jdavenportassociates.com IMPORTANT DISCLAIMER: Educational only—not investment/tax/legal advice. No strategy guarantees results—vary by rates, markets, laws, personal circumstances. Consult advisors. |
| References & Sources Northwestern Mutual 2026 Planning & Progress Study, April 1, 2026 (news.northwesternmutual.com) Federal Reserve Survey of Consumer Finances, 2022 (federalreserve.gov) Fidelity Investments: Average Retirement Savings by Age, Q4 2024 Data (fidelity.com) Empower Personal Dashboard: Average Retirement Savings by Age, January 2026 (empower.com) IRS: 401(k) Contribution Limits for 2026 (irs.gov) Social Security Administration: Retirement Planner, Full Retirement Age (ssa.gov) |