Americans now believe they need about $1.46 million to retire comfortably, according to the 2026 Planning and Progress Study by Northwestern Mutual, highlighting how inflation and longer life expectancy are reshaping retirement plans across the United States.
The figure marks an increase of roughly $200,000 from last year's estimate of $1.26 million. The rising target reflects growing concern about the long-term impact of inflation, future retirement income, and the possibility of living longer than previous generations.
The study, conducted by The Harris Poll on behalf of Northwestern Mutual, surveyed 4,375 US adults in January 2026 about their financial planning attitudes and retirement expectations.
The Rising Retirement 'Magic Number'
The retirement savings target is often referred to as the 'magic number,' which represents the amount people believe they need to leave the workforce while maintaining their standard of living. In 2026, that number stands at $1.46 million. John Roberts, chief field officer at Northwestern Mutual, said several factors are driving the increase.
Persistent inflation, longer lifespans, and uncertainty about the future of Social Security are influencing how Americans calculate their retirement needs, Roberts said, adding that retirement planning has become more complex as households try to account for long-term financial risks.
The study also highlights a gap between expectations and preparedness. Forty-six percent of Americans say they do not expect to be financially ready for retirement. Even among those who are saving, progress remains uneven. Nearly a quarter of respondents with retirement savings say they have set aside one year or less of their current income.
Living Longer Means Saving More
Longer life expectancy is another factor reshaping retirement calculations. More than a quarter of Americans believe they could live to 100 years old, according to the Northwestern Mutual study. While longer life can be positive, it also means retirement savings must last significantly longer.
Nearly 48 percent of Americans say it is somewhat or very likely they could outlive their savings. The concern is particularly strong among middle generations, with 55 percent of Millennials and 50 percent of Gen X respondents saying they worry their savings may not last throughout retirement.
The survey also found that Americans begin saving for retirement at an average age of 31 and expect to retire at 65. If people live into their 90s or beyond, retirement could last three decades or longer, increasing pressure on savings and investment income.
Retirement Is No Longer the End of Work
The study also suggests retirement is gradually evolving. Forty-one percent of Americans say they plan to work during retirement or are already doing so. Among Millennials and Gen X respondents, that figure rises to 50 percent.
Financial reasons play a role. Forty-eight percent say they want additional income to support their preferred retirement lifestyle, while 47 percent say they may need extra income simply to afford retirement. However, motivations extend beyond money. Fifty-six percent of respondents say continuing to work helps them feel useful or mentally stimulated.
The findings suggest retirement is increasingly becoming a gradual transition rather than a complete withdrawal from work.
Inflation Is Already Changing Retirement Plans
Recent economic pressures are also affecting retirement timelines. A separate survey of US workers aged 50 and older conducted by LiveCareer found that 91 percent say inflation or tariffs have already affected their retirement plans. The survey reported that three-quarters of respondents are delaying retirement because of market volatility and rising costs.
Financial pressure is also visible in household behaviour. Sixty-one percent of older workers say they regularly withdraw money from retirement accounts to cover everyday expenses, while another 30 percent say they do so occasionally.
Scott Bishop, a wealth adviser at Presidio Wealth Partners in Houston, said inflation is increasingly affecting how households manage retirement savings.
Some workers approaching retirement are drawing on long-term savings to keep up with everyday expenses, which can increase financial risks later in retirement, Bishop said. Healthcare costs remain a major concern as well. In the LiveCareer survey, 55 percent of respondents identified medical expenses as their biggest financial worry in retirement.
Technology Adds New Uncertainty
The future of work is also influencing retirement planning. The Northwestern Mutual study found that 33 percent of Americans feel somewhat or extremely pessimistic about the potential impact of artificial intelligence on their careers. Among Gen Z workers, who are earlier in their careers, that figure rises to 46 percent.
Roberts said technological change is creating uncertainty in many industries, but financial planning remains an important tool for managing long-term risk.
