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Americans adjust retirement goals up 15% but savings drop: survey

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Gen Z and millennials have bigger retirement goals, according to a recent Northwestern Mutual survey. (iStock)

The amount Americans believe they will need to retire comfortably has increased faster than inflation, but what they are saving has dropped, a recent survey said. 

U.S. adults believe they will need at least $1.46 million to retire in style, according to a Northwestern Mutual survey. This figure is up 15% from the $1.27 million Americans said they needed last year. In 2020, survey respondents thought having $951,000 stashed away would provide a good enough cushion.  

At the same time, the average amount Americans have saved for retirement dropped to $88,400 from $89,300 in 2023, and is more than $10,000 off its five-year peak of $98,800 in 2021.

“People’s ‘magic number’ to retire comfortably has exploded to an all-time high, and the gap between their goals and progress has never been wider,” says Aditi Javeri Gokhale, chief strategy officer, head of institutional investments and president of retail investments at Northwestern Mutual. “Inflation is expanding our expectations for retirement savings, and putting the pressure on to plan and stay disciplined.” 

If you’re struggling to save for retirement in the current economy, you could consider paying down high-interest debt with a personal loan at a lower interest rate, which can help you lower your monthly payments. Visit Credible to compare options from multiple lenders at once and choose the one that’s the best for you.

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Young Americans start saving sooner

Gen Zers have bigger retirement goals and will need $1.6 million to retire comfortably, the survey said. Despite the bigger goal, this generation of U.S. adults plan to retire by age 60 because they started saving for retirement earlier. 

While the average American started saving at age 31, Gen Zers began building their retirement nest at age 22—nearly a decade earlier. By comparison, Baby Boomers started building retirement savings a full 15 years after this age and said they expect to work until the age of 72. Millennials and Gen X’ers, who began their savings at ages 27 and 31, respectively, expect to work until 64 and 67.

“These numbers tell a fascinating story about the profound shift in financial planning that has taken shape in America,” Javeri Gokhale said in a statement. “Young people today recognize the value of retirement planning and building wealth early on in life and are getting a significant head start over their parents and grandparents.”

“At the same time, Gen Z is redefining retirement and signaling that they plan to have long and fulfilling post-career lives,” Javeri Gokhale continued. “The good news is that they are investing earlier so they can save the money they need to enjoy it.”

If high-interest debt is preventing you from saving more for retirement, you could consider paying it off with a personal loan at a lower interest rate. Visit Credible to find your personalized rate in minutes without affecting your credit score.

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Only half of Boomers believe they are ready to retire

More than 4 million U.S. adults will turn 65 this year. Still, among the generations closest to retirement, only half of Boomers (49%) and Gen Xers (48%) believe they will be financially prepared to retire comfortably, with many expecting that they will likely outlive their savings.

Even more problematic is that while many older Americans across both generations anticipate a retirement shortfall, more than a third (37% and 38%, respectively) have not addressed it. One way older adults can prepare is by minimizing the taxes they pay on their retirement savings, yet only 37% have a plan in place.

“Putting money into a 401K may not be enough to retire comfortably if the financial plan doesn’t address the impact of taxes on retirement income,” Javeri Gokhale said. “Most people don’t realize that their retirement income may be taxed about 20% or 30% when they withdraw and spend it. When they recognize the impact, it’s often too late for them to adjust.”  

If you are retired or are preparing to retire, paying down debt with a personal loan can help you reduce your interest rate and your monthly expenses. You can visit Credible to compare multiple personal loan lenders at once and choose the one with the best interest rate for you.

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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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These are 3 big things we’re watching in the stock market this week

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A security guard works outside the New York Stock Exchange (NYSE) before the Federal Reserve announcement in New York City, U.S., September 18, 2024. 

Andrew Kelly | Reuters

The stock market bounce last week showed once again just how dependent Wall Street has become on the whims of the White House.

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These U.S. consumer stocks face higher China risks

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Apple iPhone assembly in India won’t cushion China tariffs: Moffett

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Street's biggest Apple bear says a production move to India is unrealistic

Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.

Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.

He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.

“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”

Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.

“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.

Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.

“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”

Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.

“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”

Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.

“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”

According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.

“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”

Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.

To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5, at the Nasdaq in Times Square.

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