Retirement Planning Study 2023: Americans' Financial Attitudes and Behaviors
The 2023 Planning & Progress Study by Northwestern Mutual delves into US adults' money attitudes and behaviors. It reveals that Americans believe they need $1.27 million to retire comfortably, an increase from last year. The study also shows that the average amount saved for retirement has modestly risen to $89,300. People in their 50s anticipate needing over $1.5 million for a comfortable retirement.
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2023 Planning & Progress Study Work & Retirement Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI and its subsidiaries. The Northwestern Mutual Life Insurance Company Milwaukee, WI
Background & Methodology Background The 2023 Planning & Progress Study, a research series from Northwestern Mutual, explores US adults attitudes and behaviors toward money, financial decision-making, and the broader issues impacting people s long-term financial security. Methodology The Harris Poll conducted 2,740 online interviews among the general U.S. adult (18+) population, with oversamples of Gen Z & High Net Worth (total household investable assets, excluding pensions, retirement plans and property, greater than $1,000,000) between February 17th and March 2nd. Data for the general U.S. population (including the Gen Z & High Net Worth oversample) were weighted to Census targets for education, age, gender, race/ethnicity, region and household income. A full methodology is available. 2
Americans believe they will need $1.27 million to retire comfortably, up from $1.25 million reported last year. Amount Needed to Retire Comfortably $0 1% $1-$4,999 1% $5,000-$24,999 2% Average Needed to Retire Comfortably: 2023 $1,266,900 (Mean) $25,000-$74,999 5% $75,000-$124,999 6% $125,000-$199,999 1% $200,000-$499,999 7% 2022 $1,253,000 (Mean) $500,000-less than $1M 9% $1-2 Million 13% More than $2M 6% Don't know 48% BASE: ALL QUALIFIED RESPONDENTS 2022 Gen Pop (n=2357); 2023 Gen Pop (n=2368) Q54. In a specific dollar amount, how much do you think you will need to save in order to retire comfortably? 3
The average amount that U.S. adults have saved for retirement modestly increased by 3% to $89,300 from $86,869 in 2022. Saved for Retirement* 13% 11% Average Retirement Savings: (2023 Mean) $89,300 $0 6% 8% $1-$4,999 7% 7% $5,000-$24,999 (2022 Mean) $86,900 8% 5% 2023 (A) $25,000-$74,999 4% 4% 2022 (B) $75,000-$124,999 2% 2% $125,000-$199,999 21% 19% $200,000 or more 39% 45% Not sure *Numeric open ended questions 4 BASE: ALL QUALIFIED RESPONDENTS 2022 Gen Pop (n=2381); 2023 Gen Pop (n=2740) Q1825. How much money do you have saved for retirement (from all sources including 401(k), IRA, pension, bank accounts, etc.)? 1 U.S. BLS 12-month % change for February 2023.
Among age groups, people in their 50s expect to need the most for a comfortable retirement over $1.5 million. The numbers drop considerably for people in their 60s and 70s. All 20s 30s 40s 50s 60s 70s Amount expected to need for retirement $1.27M $1.20M $1.44M $1.28M $1.56M $968K $936K Amount saved for retirement currently $89,300 $35,800 $67,400 $77,400 $110,900 $112,500 $113,900 BASE: ALL QUALIFIED RESPONDENTS 2023 Gen Pop (n=2740) Q1825. How much money do you have saved for retirement (from all sources including 401(k), IRA, pension, bank accounts, etc.)? Q54. In a specific dollar amount, how much do you think you will need to save in order to retire comfortably? 5
Among generations, Gen Z is the most confident theyll be financially prepared for retirement when the time comes. Do you think you will be financially prepared for retirement when the time comes? % of Non-Retirees Gen Z 65% Yes 52% Millennials 54% Gen X 45% Boomers + 52% No 48% BASE: NON-RETIREES 2023 Gen Pop (n=2107) Q24. Do you think you will be financially prepared for retirement when the time comes? 6
Americans on average plan to work until the age of 65, up from 64 last year and 62.6 in 2021. How long do you anticipate you will work before you retire? 0-24 1% Mean Age : 65 Years Old 25-49 2023 2022 : 64 Years Old 2021 : 63 Years Old 2% Mean Age 50-54 2% Gen Z 60 Millennials 63 55-59 3% Gen X 65 9% 60-64 Boomers+ 71 65-69 19% Disciplined Planner 63 Undisciplined Planner 67 70-74 11% 75+ 9% I don t work 17% 26% indicated they already retired in 2023 7 BASE: QUALIIED RESPONDENTS 2023 Gen Pop (n=2740) Q1035. How long do you anticipate you will work before you retire?
Americans are most looking forward to relaxing, family time and traveling in retirement. What are you most looking forward to about retirement? Having more time to relax 55% Spending more time with friends and family 51% Traveling 48% Having more time to pursue personal projects 35% Having more time for sports / fitness 21% 17% Volunteering Starting a second career that is more personally fulfilling 13% 11% Pursuing an entrepreneurial idea Going back to school 6% Other 1% Nothing, I don t want to retire and/or don t plan on retiring 11% BASE: NON-RETIREES: Gen Pop (n=2107) Q2314 What are you most looking forward to about retirement? Please select all that apply. 8
Americans are most concerned with declining heath and outliving savings in retirement. What are your biggest fears / concerns about retirement? Declining health 44% Outliving your savings 43% Boredom 31% Losing a sense of purpose 27% Drifting, feeling uncertain or indecisive about where to focus your time, attention, and energy 17% 16% Isolation from friends, family, coworkers Missing your career 16% 7% Relocating Other 1% Nothing 17% BASE: NON-RETIREES: Gen Pop (n=2107) Q2315 What are your biggest fears / concerns about retirement? Please select all that apply. 9
On average, Americans say there is a 45% chance they outlive their savings. Will Outlive Savings: (Mean) 45% 1-25% 20% 26-50% 17% 51-75% 17% 76-99% 7% 100% 11% Don t know 17% BASE: ALL QUALIFIED RESPONDENTS 2023 Gen Pop (n=2740) Q1645. In your opinion, what is the likelihood that you could outlive your savings? 10
One third (33%) havent taken any steps to address the possibility of outliving their savings. I have increased my savings 28% I have put together a financial plan 22% I have purchased investments 19% I have discussed options with my family 17% I have sought advice from an advisor 20% I have purchased insurance 16% I have conducted research, information searches 15% I have learned more about government assistance available to me 12% I have obtained information from related associations (e.g., AARP) 8% % Have Not Taken Any Steps Has a Financial Advisor 11% I have not taken any steps 33% Has No Financial Advisor 46% BASE: ALL QUALIFIED RESPONDENTS 2023 Gen Pop (n=2740) Q1655.What steps, if any, have you taken to address the possibility that you may outlive your savings? 11
Three in ten (28%) Americans think it's likely they'll live to a 100. Expectations are much greater among younger adults. Likelihood of Living to 100 Total Likely 28% 8% % Highly Likely & Likely Men 31% 20% Women 26% Highly likely Gen Z 40% Likely 40% Millennials 40% Unlikely Gen X 22% Highly Unlikely Boomers+ 20% 31% 2023 BASE: ALL QUALIFIED RESPONDENTS: 2023 Gen Pop (n=2740) Q26 What in your opinion is the likelihood that you ll live to 100? 12
Gen Z seeks to retire at age 60 and many believe they will live to age 100. Gen Z Gen Z How long do you anticipate you will work before you retire? Likelihood of Living to 100 0-24 3% Total Likely 40% 25-49 7% 8% Gen Z Mean Age: 60 Years Old 50-54 7% 31% 55-59 7% Highly likely 18% 60-64 Likely Unlikely 65-69 18% 43% Highly Unlikely 70-74 10% 75+ 6% 17% I don t work 19% 2023 6% indicated they already retired in 2023 BASE: ALL QUALIFIED RESPONDENTS: 2023 Gen Pop (n=2740) Q26 What in your opinion is the likelihood that you ll live to 100? Q1035. How long do you anticipate you will work before you retire? 13
More than four in ten Americans (42%) can imagine a time when Social Security no longer exists. Can imagine a time when social security does not exist Yes 42% No 58% BASE: ALL QUALIFIED RESPONDENTS 2023 Gen Pop (n=2740) N36. Can you imagine a time when Social Security doesn t exist anymore? 14
People are relying on Social Security to provide 28% of their overall retirement funding, more than personal savings (22%) and equal to retirement savings (28%). % Delivering to Overall Retirement Funding (Mean) 401(k) or other retirement account 28% % Social Security Gen Z 15% Social Security 28% Millennials 19% Personal savings or investments 22% Gen X 27% Support from spouse/partner Boomers+ 38% 8% Inheritance 6% Support from children 3% Other 6% BASE: ALL QUALIFIED RESPONDENTS 2023 Gen Pop (n=2740) N37. Among the following, what percentage of your overall retirement funding do you expect each to deliver? 15
