Americans say $1.26M is the 'magic number' to retire comfortably, predictably it's higher in California

OAKLAND, Calif. - New research shows U.S. adults believe the "magic number" they need to retire comfortably sits at $1.26 million, with more than half of those surveyed saying they will likely outlive their savings. 

The findings by financial services firm Northwestern Mutual show that the target number has come down since last year, though it still remains far higher than what many people have actually saved for their golden years.

Last year, that figure stood at $1.46 million.

What they're saying:

"One explanation for the new number could be inflation – while still people's #1 concern – isn't as elevated as it was in recent years," the financial company explained, adding," Inflation is often described as 'sticky' because it can take a long time for people's attitudes about it to change." 

SEE ALSO: How much is $100K salary worth in San Francisco, Oakland?

Northwestern Mutual's 2025 Planning & Progress Study was released earlier this month, with the survey being conducted back in January before Donald Trump took office. 

‘Financial anxiety’

Researchers said the findings also show the level of concern over current retirement savings has skyrocketed. 

"The vast majority are living with financial anxiety," Northwestern Mutual said.

Fueling that anxiety are worries about Social Security and inflation.

Overall, the survey found that among those Americans who have started retirement savings, 25% said they have just one year or less of their current annual income put aside.

Northwestern Mutual’s financial experts stressed that it is important to consider that one size does not fit all when it comes to retirement planning, which should be highly personalized.

"Everyone deserves their own 'magic number' that considers where they will live, what lifestyle they will have, their sources of income, and more," said Northwestern Mutual’s chief field officer, John Roberts.

California's ‘magic number’

When looking at the "where people live" factor, figures show that, perhaps predictably, those in the Golden State have a higher "magic number." 

However, perhaps surprisingly, it’s not that much higher than the national figure. 

Northwestern Mutual said its findings show that California's "magic number" for retiring comfortably is only about $200K more, at $1.47 million.

Dig deeper:

A recent study by personal finance website GoBankingRates put the California number far higher, estimating 20-years of comfortable retirement would cost more than $2.3 million.

GoBankingRates put the annual spending during retirement at about $162K.

Its researchers also broke down how much monthly savings would be required over 20 years to reach that goal and cover costs through age 85: 

• Starting at age 20, you would need to save $4,334.
• Starting at age 30, that figure goes up to $5,573 a month.

General savings rule

In the quest to retire comfortably, Northwestern Mutual said generally, people should aim to replace roughly 80% of their pre-retirement income. 

Financial experts also note the importance of weighing in factors like when people want to retire, where they'll live, and what kind of lifestyle they want to maintain.

Generational Differences

With many Gen X'ers— those born between 1965 and 1980, approaching their retirement years, Northwestern Mutual found a majority in that age group reported that they will not be prepared when the time comes.

According to the survey, 52% of Gen Xers said they have, at most, three times their current annual income saved.

That figure is higher among Millennials, defined as the population born between 1981 and 1996, and the younger Gen Z generation— those born from 1995 to 2012. 

The survey found that Gen Z expressed the most confidence that they'll be financially prepared for retirement.

"Younger Americans have ambitious financial goals – and they're taking action to reach them," Roberts said. "If this generation determines how much they need to save, continues to generate wealth, and protects what they've already built, they could be in a strong position to achieve financial security."

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