Milwaukee, Oct. 19 /PRNewswire/ -- Who needs to be a millionaire? Most young adults think they'll need to be millionaires before they retire, according to a new poll by the Northwestern Mutual Foundation's financial literacy Web site, Themint.org.
Visitors to the site were asked how much money they would need to have saved in order to retire. More than four out of five respondents (about 85 percent) aged 18 to 29 said they would need at least $1 million, and almost half (45 percent) said they would need at least $2 million. In comparison, only 60 percent of adults aged 30 and up thought they would need to save $1 million, and only 27 percent thought they would need at least $2 million.
"While today's adults think they'll need one nest egg to retire, young people think they'll need a baker's dozen," said Meridee Maynard, financial literacy expert and senior vice president, Northwestern Mutual. "In contrast to their older counterparts, young adults see a need to save more for retirement, which is wise given this generation is expected to live longer than any in history."
Over the past century, the average lifespan of people in the United States lengthened by more than 30 years(i). In late August, the U.S. Centers for Disease Control and Prevention announced that U.S. life expectancy had reached an all-time high, climbing to 77.9 years in 2007(ii). The U.S. Census Bureau projects life expectancy will exceed 79 years by the year 2015(iii), and new mortality tables indicate that some Americans could even live until the age of 121(iv).
"The phrase 'life goes on' is quickly becoming 'life goes on and on and on,'" said Maynard. "Young people may spend more time and money in retirement, but fortunately, they also have time to prepare. Knowledge is power -- people who identify their savings goals today are better able to achieve financial security tomorrow."
Women Expect Longer Life, But Plan to Save the Same Amount as Men
Themint.org poll also found that women expect to live longer than their male counterparts, and yet their goals for retirement savings are almost exactly the same.
Almost 65 percent of women expected to live to at least 86 years old, compared to only 50 percent of men. However, when asked about retirement savings goals, answers offered by women and men were nearly identical. About 30% of both men and women said they wouldn't need more than $1 million, 70% said they would need more than $1 million, and about 40% said they would need more than $2 million.
The U.S. Centers for Disease Control and Prevention reports that life expectancy for American women is about five years longer than it is for men(v).
"It is critical for women to start early and take control of their long term financial security," Maynard said. "On average, women live longer than men, and that means they'll spend more time and potentially more money in retirement."
- Northwestern Mutual's MoneySmart video: "How much money do people need to retire?"
- Chart: "Young Adults See Need to be a Millionaire to Retire"
- Chart: "Half of Young Adults See Need to be a Multimillionaire to Retire"
- Chart: "Americans are Living Longer and Longer"
- Chart: "Women Expect to Live Longer Than Men"
- Chart: "Women Live Five Years Longer Than Men"
- Chart: "Women Plan to Save About Same Amount as Men for Retirement"
Online Calculators Offer Learning Opportunities
How long will you live? How much will you need to save? How long does it take to become a millionaire? Northwestern Mutual offers three online calculators to help people to answer these important questions and prepare for a more secure financial future.
- The Lifespan Calculator, using the latest information from the National Center for Health Statistics(vi), considers 13 lifestyle factors including diet, drinking, smoking and stress to estimate life expectancy.
- The Retirement Savings Calculator helps users estimate how much they may need to save to maintain their lifestyle in retirement.
- Themint.org's When Will You Be a Millionaire helps people to estimate how long it might take to become a millionaire while using different savings plans.
About Themint.org Poll
From July through September 2009, visitors to the financial literacy Web site Themint.org were invited to answer two questions linking retirement savings and life expectancy projections. A combined total of more than 1,200 respondents nationwide provided insight into their expectations for retirement, and the results were then analyzed based on several demographic factors including the age, gender and location of respondents.
This poll marks the seventh in an ongoing series of polls by Themint.org, with the aim of bringing continued awareness to financial literacy issues. Poll results are archived on the site and can be viewed at http://www.themint.org/polls.
Launched in 1997, Themint.org is a collaboration between the Northwestern Mutual Foundation, the charitable arm of Northwestern Mutual, and the National Council on Economic Education (NCEE). The site provides fun activities, games, challenges, quizzes and tests for students and teens, helpful tips for parents, and entertaining programs and lesson plans for teachers to promote financial literacy.
About Northwestern Mutual
The Northwestern Mutual Foundation is committed to improving quality of life by concentrating its charitable contributions in the areas of Education, Health and Human Services, and Arts and Culture. In 2008, the Northwestern Mutual Foundation contributed $19.5 million to community betterment, both locally and nationally.
The Northwestern Mutual Life Insurance Company - Milwaukee, WI (Northwestern Mutual) has helped clients achieve financial security for more than 150 years. Northwestern Mutual and its subsidiaries offer a holistic approach to financial security solutions including: life insurance, long-term care insurance, disability insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; and Northwestern Long Term Care Insurance Company; and Russell Investments.
Further information can be found at http://www.northwesternmutual.com.
(i) "Ten Great Public Health Achievements -- United States, 1900-1999." Center for Disease Control. Apr 2, 1999. http://cdc.gov/mmwr/preview/mmwrhtml/00056796.htm.
(ii) "Life Expectancy Reaches a New High." U.S. News & World Report. Aug 21, 2009. http://www.usnews.com/money/blogs/planning-to-retire/2009/08/21/life-expectancy-reaches-a-new-high.html.
(iii) "Retirees Hit by Longevity Risk." Reuters. Nov 21, 2008. http://www.reuters.com/article/domesticNews/idUSTRE4AK3X720081121.
(iv) "2001 Commissioners' Standard Ordinary (CSO) Mortality Table." American Academy of Actuaries. June 2002.
(v) "Life Expectancy Reaches a New High." U.S. News & World Report. Aug 21, 2009. http://www.usnews.com/money/blogs/planning-to-retire/2009/08/21/life-expectancy-reaches-a-new-high.html.
(vi) U.S. Decennial Life Tables for 1999-2001, United States Life Tables by Elizabeth Arias, Ph.D.; Lester R. Curtin, Ph.D.; Rong Wei, Ph.D.; and Robert N. Anderson, Ph.D, http://www.cdc.gov/nchs/data/nvsr/nvsr57/nvsr57_01.pdf.
SOURCE Northwestern Mutual