The 2024 Retirement Gap


by Christopher E. Mediate

You’ve probably heard it countless times by now, but the modern-day retirement looks different. This is thanks to a variety of reasons we can’t even begin to get into right now. But the gap between what it took to retire comfortably then versus what it takes now couldn’t be more striking.

According to Northwestern Mutual’s 2024 Planning & Progress Study, Americans believe they need $1.46 million to achieve their ideal retirement. That is up a whopping 53% from where it was just two years ago. This study polled 4,588 U.S. adults back in January.

But here’s the kicker: the study also found that the average amount saved for retirement decreased to $88,400. Not a dramatic decrease from last year’s report, but that’s not the point.

The point is that this has been a growing trend over the last 10 years. It’s given us a snapshot of the true gap between America’s retirement goals and savings. There is a fundamental, glaring disconnect – and it’s time to take action.

The Gap (Itemized)

Spanning from Gen Z’s to Baby Boomers, the report displays that each generation faces a similar gap. For example, Gen Z believes you need as much as $1.63 million to live out their golden years on their terms. And yet, they only have $22,800 saved on average, according to the report.

That’s a $1.61 million gap in just that example. An extreme one, at that. But how do the others fair? Let’s pick on Millennials next. Per the study, the gap is still there, but not quite as extreme. They appear to think they’ll need a little more than what Gen Z thinks ($1.65 million) and they also have almost 3 times as much saved on average ($62,600).

To compare across extremes, Boomers feel like they need far less ($990,000) and have twice as much saved on average ($120,300) compared to Millennials. But still, that gap is $870,000.  

Fascinating statistics, but what are they really telling us? For one, it’s clear that everyone’s “magic number” for their retirement has increased to unprecedented levels. It also says that at this point in time, people are struggling to make meaningful progress toward their financial goals. In general, but in this particular case, toward retirement.

This tells us quite a bit, but let’s keep digging.

How We’re Different

Contrary to what people say and how the raw statistics of this study may look, Gen Z’s heart is in the right place when it comes to their mentality toward saving. According to the study, the average Gen Z’er begins saving at 22. That’s 5 years earlier on average than Millennials (27) and a whole 15 years earlier than the average Boomer (37!).

While it’s great that they feel the squeaky wheel gets the oil, their idea of when they think they should retire explains the origin of this mentality. They expect to retire at 60. For reference, the average across all brackets was 65.

Basically, young people don’t want to be working longer than they need to, but also aren’t saving nearly enough. However, it can’t be understated that Gen Z does indeed see value in early planning – this is promising. This could simply come back to the current economic climate being what it is, as well as looming fear of social security running out. Even still, it’s a trend that I hope to see continue. The study also reminds us of the other considerations that go into generational budgeting that are pretty true across the board.

Some Hard Truths

First, while early planning is important, the gap between our goals and progress reminds us that it’s not enough to simply start early. That’s one component to it. It also reminds us there’s plenty that falls out of our control.

So, we must also be intentional about ensuring that you have a financial plan in place that is not only covering all your bases, but also working as effectively as possible toward your goals. If you review your budget – by yourself or with a financial professional – and you find that you can afford to be taking out more money per paycheck toward your savings, that’s no small thing and not uncommon. In this process, you might also find unnecessary expenses in your budget that have been passively eating away at your saving potential.

Additionally, there’s also a degree of self-reflection. Do you know what your goals are and how sure are you that the monetary goals you’re putting on them are realistic? Remember, financial planning is personal and there is no country-wide standard “magic number” that everyone should be saving toward. Everyone’s situation is different and there’s no shortage of obstacles to account for.

For example, how tax-efficient is your plan? According to the study, just 30% of those surveyed have a plan to minimize their taxes in retirement. You could evaluate your budget and your plan and realize you’re actually a Wizkid when it comes to finance. You could also be doing so well, that you don’t even realize you’re sailing right into a tax storm. Yes, it’s possible to be too good at making money.

Where you choose to grow and withdraw your money, and when, matters! It’s crucial that you are doing what you can to survey your options and ensure that the strategies you have in place make sense for your individual situation. Do research, know what questions to ask, and don’t be afraid to seek help from a financial professional! It’s what we’re here for.


We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.