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Americans’ retirement dreams just got a little more expensive.
The amount people believe they need to retire comfortably, often called the retirement “magic number,” has climbed to $1.46 million in 2026, according to a new study from Northwestern Mutual — that’s a $200,000 jump from last year (1).
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The research comes at a time when many Americans are already feeling uneasy about their financial future.
And with people living longer than ever, the challenge isn’t just saving enough money to retire; it’s making sure that money lasts for decades after they stop working.
Retirement targets are going up
According to Northwestern Mutual’s 2026 Planning & Progress Study, the current estimate of $1.46 million matches the record-high level recorded in 2024.
The survey of U.S. adults found that almost half (46%) don’t think they’ll be financially ready for retirement when the time comes. Meanwhile, 48% say it’s somewhat or very likely they’ll outlive their retirement savings.
A significant 27% of Americans surveyed believe they could live to age 100. On average, Americans say they plan on retiring at age 65 — which would mean a retirement that could last 30 years or more.
Half of Gen X respondents worry they could outlive their savings, while 20% say financial concerns have already forced them to delay retirement.
The study also found about 41% of Americans say they already work or are planning to work during retirement, including half of Millennials and Gen Xers.
That decision is about staying active and engaged for some, but for many others, it’s about finances. Nearly half of the respondents who expect to work in retirement say they’ll need the income to afford their desired lifestyle.
Another growing concern is the future of Social Security.
One-third of Americans identified the question “Will Social Security be there when I qualify for it?” as one of their biggest retirement worries.
With rising retirement targets and growing uncertainty about future income sources, financial experts say focusing solely on hitting a specific savings number may not be enough.
How to make sure your retirement savings last
The good news is that a $1.46 million retirement target isn’t necessarily as intimidating as it sounds.
Savers can consider focusing less on a single “magic number” and more on building a realistic plan based on their expected spending, income needs and retirement goals.
To help figure out how much you may need, Northwestern Mutual points to a few retirement strategies.
One is the 25x Rule, which suggests saving roughly 25 times your expected annual retirement spending. Under that formula, someone who expects to spend about $58,000 a year in retirement would need approximately $1.46 million saved.
Another guideline is the $1,000-a-month rule, which estimates that every $1,000 of monthly retirement income requires roughly $300,000 in savings. Using that calculation, a $1.46 million nest egg could generate around $4,800 in monthly retirement income.
There’s also the traditional 4% rule, which suggests retirees may be able to withdraw 4% of their savings in their first year of retirement and adjust that amount for inflation over the following decades.
But Northwestern Mutual cautions that rules of thumb are only starting points. There are other factors to consider such as rising healthcare costs, long-term care needs, taxes or legacy planning goals.
Here are some additional strategies that can help stretch retirement savings over the long haul.
Maximize retirement account contributions.
The IRS increased 401(k) contribution limits to $24,500 for 2026, giving workers an opportunity to shelter more money from taxes while building long-term wealth.
But boosting your retirement savings is only part of the equation. It’s also worth paying attention to where that money is invested. If most of your nest egg is tied up in stocks — particularly large technology companies that have driven much of the market’s recent gains — your portfolio is vulnerable as investor sentiment shifts (2).
Adding assets that behave differently from stocks can help reduce overall portfolio risk.
Gold has historically provided diversification because it doesn’t always rise and fall alongside the broader stock market, making it a potential hedge during periods of uncertainty.
Opening a gold IRA with the help of American Hartford Gold allows you to invest in gold and other precious metals in physical form while also providing the significant tax advantages of an IRA.
You can get free setup, shipping and insured storage for up to five years with American Hartford Gold. Plus, you can roll over your existing IRA or 401(k) into a precious metals IRA completely tax and penalty-free.
Even better? Qualifying purchases can also receive up to $25,000 in free silver and a free information guide when you sign up.
Cushion your future with an annuity
Saving for retirement is only one part of the equation. You also need to think about how you’ll turn that nest egg into a steady stream of income once your regular paycheck stops.
That can be tricky. Even if you’ve built a sizable portfolio, a sudden market downturn could knock a significant chunk off its value. And with inflation continuing to push up the cost of everyday expenses, your retirement dollars may not stretch as far as you expected.
The underlying principle is relatively simple — you give an insurance company money through a lump-sum payment or a series of payments, and in return, it agrees to provide you with income either immediately or in the future. Depending on the type of annuity, those payments may continue for a set period or for the rest of your life.
Still, there’s plenty to consider before buying one. Fixed, variable and indexed annuities have different rules, costs and potential risks, and some contracts can come with surrender charges or other restrictions.
Annuity.org can help you compare available options and lock in a competitive rate.
They provide educational resources and can connect you with specialists who can help explain different options and determine whether an annuity fits your retirement strategy. The process takes three steps: explain your retirement goals, review suitable annuity options and select the contract that fits your needs. Right now, you could get fixed annuity rates as high as 6.45%.
Just answer a few questions about your retirement goals to get a free quote and schedule a free retirement income consultation to compare your options.
Build an emergency fund
According to the Consumer Financial Protection Bureau, emergency savings can help retirees avoid withdrawing from investments during market downturns or relying on costly debt when unexpected expenses arise (6).
That’s one reason personal finance expert Suze Orman recommends retirees keep three-to-five-years’ worth of living expenses in readily accessible savings. If markets experience a major crash, that cushion may provide enough time for investments to recover before withdrawals become necessary.
Use a high-yield account
A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.
A Wealthfront Cash Account currently offers a base rate APY of 3.55% through program banks. With a new client boost and direct deposit incentive, referred clients can earn up to a 4.55% APY.
That’s 10 times the national deposit savings rate, according to the FDIC’s August report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.
Plan for healthcare expenses
Healthcare remains one of the largest retirement costs.
Fidelity estimates that the average retiree may need roughly 15% of their retirement income to cover medical expenses not paid by Medicare (7).
Consider delaying Social Security
The Social Security Administration notes that monthly benefits increase for workers who delay claiming beyond full retirement age, up to age 70. While delaying benefits can produce larger monthly checks, those payments may also be taxable (8).
With this in mind, there’s no universal “best” age to file. The right decision depends on factors like your health, retirement savings, tax situation and expected income throughout retirement.
A financial advisor can help evaluate your retirement income, tax situation and long-term goals to determine the right time to claim Social Security. They can also build a plan that’s less dependent on government benefits, particularly as questions continue to circulate about the potential depletion of the Social Security trust fund by 2032 (9).
You can easily connect with a vetted FINRA/SEC-registered financial advisor near you for free through Advisor.com.
All you have to do is answer a few questions about your financial situation, and Advisor.com will connect you with a qualified expert. Every advisor on their network is a fiduciary, meaning they’re legally obligated to act in your best interests.
Even better, Advisor.com lets you set up a free initial consultation with no obligation to hire to see if your match is the right fit for you before making a decision.
Earn passive income in retirement
Running out of money can sound like a distant retirement worry — until you see just how widespread the fear has become. A striking 67% of Americans say they worry more about running out of money than death, according to Allianz Life’s 2026 Annual Retirement Study. That’s 10% higher than in 2022 (10).
If your retirement savings aren’t quite keeping pace with that ever-rising “magic number,” simply saving more may not be the only piece of the puzzle. That’s why creating passive income sources could add another layer of financial support.
Real estate is one option. Because property values and rents are influenced by local conditions such as supply, demand, location and rental prices, real estate can behave differently from traditional investments such as stocks and bonds. Rental properties, in particular, can potentially generate ongoing income while giving investors exposure to the housing market.
Of course, owning a rental property isn’t as easy as it sounds. You need a large amount of cash upfront, and that’s just the beginning. Mortgage payments, property taxes, insurance, maintenance and repairs can all chip away at your returns. Then there’s the landlord side of the equation — finding tenants, dealing with problems and keeping the property in shape.
That’s where platforms like Arrived can help.
Backed by world-class investors like Jeff Bezos, Arrived lets you invest in shares of rental properties across the country with as little as $100.
To get started, simply browse through their selection of vetted properties, each picked for its income-generating potential and prospective long-term market appreciation.
Arrived distributes any rental income generated by properties to investors monthly, allowing you to set up a passive income stream without the extra work that comes with being a landlord of your own rental.
The best part? For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
— With files from Jessica Wong
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Northwestern Mutual (1); CNBC (2); National Foundation for Credit Counseling (3); TransUnion (4); Forbes (5); Consumer Financial Protection Bureau (6); Fidelity (7); Social Security Administration (8); Center on Budget and Policy Priorities (9); Allianz Life (10)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
