Hello,

Recent research found a new "magic" retirement savings number.

(We’ll explain how inflation factors in below.)

We say “magic” because if you put 10 people in a room, you’ll get 10 different opinions about how much you should save for retirement.

And this estimate is no different.

Northwestern Mutual surveyed 4,588 adults and found:

The new “magic” number for a comfortable retirement is $1.46 million.¹

It’s up 15% from last year’s $1.27 million number and is also an eye-popping 53% higher than the 2020 estimate.²
 

Broken down by generation, the numbers get even bigger.

Gen Z and Millennials expect to need around $1.6 million to comfortably retire.¹

And folks with over $1 million saved believe they’ll need nearly $4 million to be comfortable.
 

Does the average American actually need $1.46 million to retire comfortably?

Probably not.

Another “magic” number from Fidelity suggests Americans should have 10x their income saved by age 67.³

If we 10x the median household income of $74,580, we get $745,800.⁴

That’s about half of the first “magic” number.

For some Americans, $750k will be enough to retire on. For others, it won't be nearly enough to support the lifestyle they want.

Planning for retirement isn’t about “magic” numbers.

When we consider that the average retirement savings hovers around $88,000, the gap between desire and reality has never been greater.¹

Most people don’t really know how much money they will need in retirement and can wildly over or under-estimate it.

As much as humans like to look for simple answers and rules to follow, turning a portfolio into retirement income is complex.

We wish we could give each person in that survey an advisor to help them calculate their own retirement target instead of guessing.

Inflation is weighing heavily on our fears for the future, and may be impacting these surveys.

Inflation has been very high for the last few years, and (in our opinion) the survey may reflect the worry many feel about how much prices are rising. And how long high inflation will linger.

The latest March report shows that prices rose 3.5% over the last 12 months.⁵

That's stronger than analysts had expected, and increases concerns that inflation isn't actually tamed yet.

This negative surprise could push back a Fed interest rate cut and stoke market volatility.

We're keeping an eye on the situation and will be in touch with updates as needed.

Be well,
 
Your Eagle Wealth Team

Four Tips To Help You Sleep Better

Sleep is one of the most important things we do to stay healthy and energized. Much more goes into getting a good night’s sleep than simply resting your head on the pillow, so here are some tips for getting your shut-eye:

•             Increase bright light exposure during the day - You probably already know that it helps to keep your room dark while you sleep, but did you know it’s also beneficial to get enough bright light during the day? These contrasts tell your body when it’s time to go to sleep. This natural clock is called your circadian rhythm.
 
•             Reduce blue light exposure in the evening - The luminance from our devices (smartphones, tablets, and TVs) is called blue light and can disrupt your sleep cycle. Try to limit blue light at least two hours before bedtime. Some devices offer a setting that automatically “warms” the light to limit these blue hues.
 
•              Sleep schedule - Try to wake up and sleep consistently, even on weekends, as this is another way to set up your body’s circadian rhythm for success.
 
•             Bedroom temperature - Did you know that the temperature in your bedroom can affect your sleep? Some studies show that temperature matters even more than noise, and some sleep experts recommend keeping your bedroom at around 70 degrees.
 
Tip adapted from Healthline

The Week on Wall Street

Stocks fell last week as investors sorted through conflicting inflation reports and assessed geopolitical tensions.

Inflation Spooks Markets

On Wednesday, the March Consumer Price Index (CPI) report rattled markets, revealing that inflation accelerated slightly more than expected. Bond yields rose, and stocks retreated in response, as investors feared the news could influence the Fed’s rate decision. The 10-year Treasury yield had its highest intraday jump in three years.6,7,8

Markets rallied Thursday as investors were encouraged by the Producer Price Index (PPI) report, which measures inflation at the producer level. Unlike CPI, PPI rose less than expected, which sparked a tech-focused rally. Markets opened lower on Friday as investors wrestled with the conflicting inflation reports.

Fears of an escalating Middle East conflict also weighed on stocks during the week. Concerns about a potential weekend event led some investors to end the week in a risk-off position.9

Inflated Expectations

Minutes from the March Fed meeting, published Wednesday, showed officials’ concern that inflation wasn’t slowing down quickly enough toward the Fed’s 2% target. But despite sticky inflation, they reiterated that rate cuts were still on the table for this year.

The start of Q1 earnings season reinforced inflation concerns as several leading money center banks—despite many beating expectations—forecasted lower growth for the remainder of 2024 due partly to inflation and higher-than-expected rates.

On Friday, the University of Michigan’s survey showed consumer sentiment fell last month. Some concluded that the survey confirmed what consumers have been saying for months—that inflation is still in their everyday lives.^10,11

Any companies mentioned are for informational purposes only, and this should not be considered a solicitation for the purchase or sale of their securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. Source: YCharts.com, April 13, 2024. Weekly performance is measured from Monday, April 8, to Friday, April 12.ROC 5 = the rate of change in the index for the previous 5 trading days. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.

1.  https://news.northwesternmutual.com/2024-04-02-Americans-Believe-They-Will-Need-1-46-Million-to-Retire-Comfortably-According-to-Northwestern-Mutual-2024-Planning-Progress-Study

2. https://news.northwesternmutual.com/2023-06-22-Americans-Believe-They-Will-Need-1-27-Million-to-Retire-Comfortably,-According-to-Northwestern-Mutual-Planning-Progress-Study

3. https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire

4. https://www.census.gov/library/publications/2023/demo/p60-279.html

5. https://www.cnbc.com/2024/04/10/cpi-inflation-march-2024-consumer-prices-rose-3point5percent-from-a-year-ago-in-march.html

Chart source: https://news.northwesternmutual.com/2024-04-02-Americans-Believe-They-Will-Need-1-46-Million-to-Retire-Comfortably-According-to-Northwestern-Mutual-2024-Planning-Progress-Study

6. The Wall Street Journal, April 12, 2024

7. CNBC.com, April 10, 2024

8. The Wall Street Journal, April 11, 2024

9. CNBC.com, April 12, 2024

10. MarketWatch.com, April 11, 2024

11. CNBC.com, April 10, 2024

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