Mortgage News - Study: Rising Retirement Age, Increased Savings

Study: Rising Retirement Age, Increased Savings

Mortgage News July 6, 2023

Based on the 2023 Planning and Progress study by Northwestern Mutual, the average retirement savings in the United States have experienced a 3% boost, reaching $89,300 in 2023 compared to $86,869 in 2022. However, there has been a notable surge in the expected retirement age, which has escalated from 62.6 years in 2022 to 65 years in 2023.

Aditi Javeri Gokhale, Northwestern Mutual’s Chief Strategy Officer, expressed that Americans’ retirement readiness goal is continuously rising. Despite high inflation and market volatility, people are saving and investing more for the future, indicating a positive trend compared to the previous year.

Gokhale highlighted intriguing patterns in the data, notably a significant gap between individuals’ retirement savings and their perceived financial requirements for retirement.

Examining age groups in particular, the study reveals interesting insights. The findings indicate that individuals in their 50s have the highest expectations, estimating a required retirement savings of $1.56 million for a comfortable retirement. Those in their 60s anticipate needing $968,000, while respondents in their 70s project a requirement of $936,000 for a comfortable retirement, as per the data.

For individuals with greater net worth, the estimated amount for a comfortable retirement increases significantly, with some anticipating a need for as much as $3 million.

When it comes to confidence in being financially ready for retirement, Gen Z exhibits the highest level, with 65% expressing their expectation of preparedness. Following closely behind are millennials at 54%, while baby boomers who have not yet retired show a confidence level of 52%.

With regards to retirement preparedness, Generation X displays the lowest level of confidence, as only 45% anticipate being ready for retirement when the time comes.

Additionally, the study discovered that individuals who consider themselves disciplined financial planners anticipate retiring at the age of 63, effectively reducing their retirement age by two years. On the other hand, informal or non-planners expect to retire at 67, extending their retirement age by two years.

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Study: Rising Retirement Age, Increased Savings

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