Retirement Savings: Reaching the ‘Magic Number’

Retirement savings: Reaching the ‘magic number’

While retirement savings may feel like a moving target, getting clear on the right number can be a powerful first step toward long-term security. For many, the so-called ‘magic number’ isn’t just a financial goal—it’s the amount they believe will cover rising living costs, unpredictable healthcare expenses, and hopefully, a little travel or leisure along the way.

This graphic, in partnership with Empower, looks at the retirement targets Americans are setting, and how close they are to reaching them.

What is the ‘magic number’?

The amount Americans believe they need to save in order to retire somewhat varies based on where they live.

On average, Americans believe they need almost $1.1 million in order to retire. However, people who live in western states like California, where the cost of living is higher, believe they will need more money.

Expectations vs. targets for retirement savings

Unfortunately, many Americans don’t expect to reach their savings goals before they retire.

On average, Americans expect to have only a quarter of the retirement savings they will need by the time they hit retirement age. Gen X anticipates being the furthest from their goal.

Bridging the retirement savings gap

To help them get closer to their required retirement savings, many Americans want their employers to automatically enroll them in workplace retirement plans.

Undoubtedly, many Americans consider employer plans a cornerstone of their retirement planning. 

Nearly one-third say they would not have started saving for retirement if it weren’t for their employer’s plan. These plans also have the potential to boost how much people save, with 35% of Americans saying they contribute enough to their 401(k) get the full employer match.

By taking advantage of employer plans, and saving as early and as much as possible, Americans can be better prepared for retirement.

For wealth-building tips and the week’s financial headlines, check out Empower’s newsletter The Currency.