You now need $1.5 million to retire comfortably; 1-5 older Americans still working

SAN ANTONIO – People should have the choice to do what they want when they get to retirement age. But we’re learning more people don’t get that option and we’re learning people are working longer and retiring later in life.

A financial services company, Northwestern Mutual Financial Planning and Life Insurance Company, did a study this year that says Americans believe that they will need about 1.5 million dollars to retire comfortably. Their “magic number” has increased 53% since 2020.

We spoke to some experts to find out what you need to do if you’re just around the corner from retiring, and wanting to do it without changing your lifestyle.

Professor of Management at the University of Incarnate Word David Vegquist says, “45 to 65 about 40% don’t even have any retirement savings.”

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He adds the cost of living going up is also forcing people to retire later coupled with people living longer as well.

“Longevity is going up and it’s increasing the time people are taking to retire or when they decide to retire,” says Vequist.

A 2023 Pew Research Center report says 1 in 5 Americans 65 and older were employed last year. That’s almost double the 1 in 10 who still worked in the 80’s. Nearly 20% of Texans over 65 are working more than the national average.

“When people stop, a lot of times they die,” says semi-retired worker Paul Turner.

Turner still manages his lawncare business of 30 years and doesn’t plan on stopping for the foreseeable future.

“When I do somebody’s yard, they get a service, they pay, we’re all happy . We’re all moving in the right direction,” says Turner.

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“The burden of planning of retirement has been shifted to the individual. I urge everybody to have a plan and to talk to somebody that they can trust — and they at least understand the basics,” says Financial Advisor for Northwestern Mutual Roberto Espinosa.

Espinosa says if you’re getting close to retirement age, save more than what you spend. And he advises people to save money in an account gaining interest.

“Definitely no need to panic, but they do need to start planning. They need to start changing their financial habits. They need to spend less than what they make, save for a rainy day because it’s going rain. We know that life throws us some curve balls. Understanding finances and understanding the magic of compounding, understanding taxes, is important. Most people spend more time planning their vacation, then their retirement. Most people spend more time on their next purchase than their retirement. And there’s nothing wrong with doing that, but they spend more time on that than their retirement. But I would like to think that the second has a bigger impact on your finances,” explained Espinosa.

“Time is the ultimate equalizer. If you’d like to have the better retirement, you’re going to have to put away money for a longer period of time. Every year that you have money in an account that’s gaining interest or appreciating in value, then you have a better opportunity to retire in the means you’d like to,” says Prof. Vequist.

To find out how much you need to retire, click here for a retirement calculator…