Nearly 60 percent of future retirees think they will need a paycheck in retirement that's as big or bigger than what they receive today to live comfortably
As retirement looms, the majority of Gen X Americans say their retirement nest egg is just three times their annual salary or less
While nearly two-thirds of Gen X says it's likely or highly likely they will experience a long-term care event, just 36% say they have planned for it financially
Long-term care risks remain high for many Boomers and Gen X'ers
MILWAUKEE, Oct. 29, 2024 /PRNewswire/ -- The oldest members of Generation X will turn 60 next year and many are starting to think about retirement. Meanwhile, 58% of Gen X'ers and 64% of Boomers+ who are not yet retired say they expect their monthly income in retirement will need to be the same or more as their current monthly income to retire comfortably. These are the latest findings of Northwestern Mutual's 2024 Planning & Progress Study, the company's proprietary research series exploring Americans' attitudes, behaviors and perspectives across a broad set of issues impacting their long-term financial security.
To retire comfortably, do you believe your monthly income in retirement will need to be more, less, or the same as your current monthly income? When estimating, use today's dollars and don't factor in the impact of inflation over time. | |||
Gen X | Boomers+ | ||
More | 33 % | 29 % | |
The same | 25 % | 35 % | |
Less | 27 % | 25 % | |
Not sure | 15 % | 10 % | |
Adding to the financial challenge, more than half of Gen X (51%) says their retirement savings are just three times larger than their annual income or less – while many financial experts recommend saving approximately 10 times an annual salary or more before retirement.
As a multiple of your current annual income, approximately how much money do you currently have saved for retirement? | |||
Gen X | Boomers+ | ||
Less than 1x my income | 16 % | 10 % | |
1x | 8 % | 5 % | |
2x | 14 % | 8 % | |
3x | 13 % | 10 % | |
4x | 9 % | 4 % | |
5x | 7 % | 9 % | |
6x | 5 % | 5 % | |
7x | 5 % | 4 % | |
8x | 2 % | 4 % | |
9x | 1 % | 3 % | |
10x | 4 % | 8 % | |
More than 10x my income | 7 % | 23 % | |
Not sure | 6 % | 9 % | |
Additionally, a majority of both Gen X'ers (52%) and Boomers+ (51%) who are not yet retired say they do not think they will be financially ready for retirement when the time comes, the lowest confidence reported among any generation.
Do you think you will be financially prepared for retirement when the time comes? | |||||
Total | Gen Z | Millennials | Gen X | Boomers+ | |
No | 46 % | 36 % | 44 % | 52 % | 51 % |
Yes | 54 % | 64 % | 56 % | 48 % | 49 % |
"For millions of Gen X'ers who are fast approaching 60, the difference between retiring on time and feeling comfortable or working longer and lowering retirement expectations will come down to financial planning," said Kamilah Williams-Kemp, chief product officer at Northwestern Mutual. "It's never too late to take action, but the challenge and the stakes rise the longer people wait."
Older generations say long-term care risk is real, but many don't have a plan for it
Seventy percent of adults who live to age 65 will experience a long-term care event during their lifetime. As the Baby Boomer generation matures into their 60s and 70s, the financial risks associated with a long-term care event like dementia, a stroke or heart attack, diabetes or a serious fall are becoming increasingly apparent. In fact, Boomers+ include long-term care concerns among their top three burning retirement questions – the only generation to rank the risk so highly.
Below are a set of common ''burning questions'' regarding retirement planning. Please select up to three that are most important to you. | ||
Boomers+ | ||
How much money will I need to retire comfortably? | 34 % | |
Is it possible I could outlive my savings? | 31 % | |
28 % | ||
How will taxes impact me in retirement? | 28 % | |
What if inflation rises when I'm retired? | 26 % | |
How should I budget for healthcare expenses? | 24 % | |
Will Social Security be there when I qualify for it? | 20 % | |
Will I have enough to leave behind assets for loved ones or charitable causes I care about? | 15 % | |
What if the stock market drops when I'm retired? | 14 % | |
None | 17 % | |
Further underscoring Americans' awareness of long-term care events, majorities of both Generation X and Boomers+ believe it's likely or highly likely they will need to provide long-term care for themselves eventually. Many also believe it's likely they will need to provide care for a loved one.
What do you think is the likelihood that you'll need to provide long-term care for yourself at some point? | |||
Gen X | Boomers+ | ||
Likely or highly likely | 63 % | 50 % | |
Unlikely or highly unlikely | 22 % | 27 % | |
Not Sure | 15 % | 23 % | |
What do you think is the likelihood that you'll need to provide long-term care for a loved one at some point? | |||
Gen X | Boomers+ | ||
Likely or highly likely | 56 % | 36 % | |
Unlikely or highly unlikely | 28 % | 48 % | |
Not Sure | 16 % | 16 % | |
Despite this widespread awareness of long-term care events and their impact on people's financial lives, far fewer older Americans say they have planned for the possibility that they will need to provide care for themselves or a loved one.
Have you planned financially for the possibility that you'll need to provide long-term care for... | |||
% Yes | |||
Gen X | Boomers+ | ||
Yourself | 36 % | 40 % | |
A loved one | 31 % | 28 % | |
"A sound financial plan should help people to do two things: build wealth and protect what they've already created. Without accounting for long-term care, people are left vulnerable to risk that's real and significant. On the other hand, planning in advance for a long-term care event is the best way to ensure that someone's wishes to age gracefully are followed and funded," said Williams-Kemp. "Addressing long-term care in a comprehensive financial plan is also the best way to ensure that the financial burden of a life event is not passed along to the next generation."
About The 2024 Northwestern Mutual Planning & Progress Study
The 2024 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual among 4,588 U.S. adults aged 18 or older. The survey was conducted online between January 3 and January 17, 2024. Data are weighted where necessary by age, gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online to bring them in line with their actual proportions in the population. A complete survey methodology is available.
About Northwestern Mutual
Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a comprehensive planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what's most important. With over $627 billion of total assetsi being managed across the company's institutional portfolio as well as retail investment client portfolios, more than $36 billion in revenues, and $2.3 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 110 on the 2024 FORTUNE 500 and was recognized by FORTUNE® as one of the "World's Most Admired" life insurance companies in 2024.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with "Advisor" in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.
i Includes investments and separate account assets of Northwestern Mutual as well as retail investment client assets held or managed by Northwestern Mutual.
SOURCE Northwestern Mutual
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