According to the 2026 Planning and Progress Study by Northwestern Mutual, the average American now believes they’ll need $1.46 million to retire comfortably. That’s a $200,000 jump from last year. For many Americans, this upward trend is unsettling.

But Americans aren’t without options, or even hope. The study showed some encouraging signs, too. We go through it all below and discuss what Americans can do to catch up.

Why the Number Keeps Rising

We’ve heard a lot of talk about the high prices of eggs, but persistent inflation hasn’t just hit our grocery bills. It raised the cost of retirement. Healthcare, housing, and everyday costs are all more expensive. Add in the uncertainty surrounding the future of Social Security and Medicare programs, and it makes sense that people feel like they’re going to need more of a cushion in retirement.

Debt Is Still in the Way

High-interest credit card debt is a current problem across every generation, and nearly all Americans carry some form of debt. Whether it’s mortgages, car loans, student debt, or credit cards, it’s all competing with retirement savings goals.

Gen-X is carrying the heaviest burden right now. In 2025, Gen-Xers held $6.69 trillion in total debt. And though they’re the generation closest to retirement, they’re the least likely generation to have a solid plan for funding their retirement years. But in a show of optimism, 47% of Gen-Xers believe that Social Security will still be available when they retire.

Millennials, on the other hand, are leaning into the importance of retirement planning more than any other generation. And they generally feel confident they’ll be able to retire comfortably when the time comes.

Americans Are Slowly Feeling Better About Their Finances

Despite high debt, financial confidence appears to be improving. The same Northwestern Mutual study found that 50% of Americans now feel financially secure, up from 44% last year. And while 53% of respondents still worry their savings won’t be enough to last in retirement, it’s an improvement from 64% in 2025.

People are still worried, but progress is progress, even if it’s slow.

“Unretirement” is on the Rise

Here’s a trend worth watching. Retirement no longer necessarily means leaving the workforce completely. According to an AARP Foresight 50+ Survey from February, between 6% and 7% of retirees returned to work within the past six months. And 48% of them said financial necessity was the main reason.

AARP expects this trend to continue as long as living costs stay high. For the foreseeable future, retirement may be more of a transition than a finish line.

What To Do From Here

Navigating a path from here depends partly on where you’re at in life.

For younger workers, time is on your side, so start saving now. Save early and save often, even if it’s a small amount. Thanks to compound growth, a little saved in your 20s will be worth more than a lot saved in your 50s.

Fidelity recommends saving 10 times your annual income by the age of 67. To help get there, it’s commonly recommended to save around 15% of income each year, adjusting that figure for individual goals and circumstances.

If you’re older and need to catch up, you still have options:

• Work a little longer. A few extra years can make a difference in what you accumulate.
• Save more. Modest savings and small increases add up over time. Start by bumping up your contribution rate by 1%
• Take the company match. If you’re not contributing enough to capture your company’s 401(k) match, you’re walking away from free money.
• Take Advantage of Catch-Up Contributions: If you’re 50 or older, you’re eligible to contribute extra to your 401(k) and IRA each year.
• Use Super-Catch-Up Contributions: As of last year, the SECURE Act 2.0 allows workers aged 60 to 63 to contribute even more.

Unless you come into a windfall, retirement savings is most likely to improve through small choices repeated over time. Every dollar you save matters. Start today and keep moving in the right direction.