Saving for retirement is something every American needs to do, but not that many Americans are great at actually doing it. According to the 2026 Northwestern Mutual Planning and Progress Study, Americans believe they need $1.46 million to retire comfortably, while a large share of the population has saved only a fraction of that amount. The gap between the nest egg people think they will need and what they actually have is staggering, and it is not getting smaller on its own.
Americans are not wrong to aim for a target topping $1 million. Social Security replaces only about 40% of pre-retirement income, and $1 million in an investment account generates roughly $40,000 per year at a safe withdrawal rate. Since most people need to replace around 80% to 90% of pre-retirement earnings, even $1.46 million may fall short, especially for those retiring decades from now whose purchasing power will erode with inflation. A 2026 Allianz Life study found that 67% of Americans now fear running out of money more than dying, a sentiment that captures the anxiety driving these savings targets higher.
The good news is that one proven habit can meaningfully close that gap. Here is what it is.
Doing this can help double your retirement savings
The habit that makes such a dramatic difference is straightforward: working with a financial advisor. Advisors can help at every phase of a financial journey, from building the initial retirement plan to strengthening overall financial stability and creating the conditions needed to save and invest more over time.
The 2024 Northwestern Mutual Planning and Progress Study was unambiguous on how much better advised Americans do compared with those going it alone. Survey respondents who had an advisor had roughly double the amount saved for retirement.
Americans without advisors had an estimated $62,000 in retirement savings, while those with an advisor had $132,000.
That gap already looks significant in isolation, but the real story emerges when compound interest enters the picture. Consider a saver who reaches $132,000 by age 45 through professional guidance. At a 10% annual return over the next 20 years, that balance grows to roughly $888,000 by age 65, even without another dollar contributed. The same math applied to $62,000 yields only about $417,000 over the same period. The difference is not just a larger account balance. It is the difference between a comfortable retirement and one defined by financial compromise.
The more recent 2026 Northwestern Mutual study reinforces this picture from a different angle. Americans who work with a financial advisor plan to retire at age 63.7 on average, roughly two and a half years sooner than those without one (who target age 66.1). And 74% of people with an advisor expect to be financially prepared for retirement when the time comes, compared with only 43% of those without one.
The “Advisor Advantage” Explained
The measurable gap between advised and unadvised savers traces back to what researchers call “behavioral alpha.” Vanguard’s Advisor’s Alpha research found that advisors following best-practice wealth management frameworks can add up to, or even exceed, 3% in net returns for their clients. The single largest contributor is behavioral coaching: keeping investors disciplined during market downturns rather than letting emotional reactions trigger costly portfolio changes. That one factor alone accounts for up to 1.5 percentage points of the total value.
Three additional mechanisms round out the structural advantage:
- Tax-Loss Harvesting: Systematically offsetting capital gains with realized losses to reduce net tax liabilities.
- Asset Location Optimization: Placing high-yield bonds and income-generating assets inside tax-deferred accounts while directing equity growth toward tax-exempt Roth accounts.
- Dynamic Rebalancing: Restoring a portfolio to its target risk profile when market movements push allocations off course.
Why working with an advisor matters so much
Professional advice lifts retirement outcomes because it touches every corner of a person’s financial life, not just their investment portfolio. The Northwestern Mutual 2024 survey data below shows how dramatically advised Americans differ from unadvised ones across a wide range of financial behaviors.
| How many Americans engage in different kinds of financial behaviors | ||
|
With an advisor |
Without an advisor |
|
|
Have a long-term plan that factors in up-and-down economic cycles over time |
79% |
38% |
|
Have an emergency fund |
84% |
48% |
|
Feel financially secure |
64% |
29% |
|
Have good clarity on how much they can afford now vs. save for later |
79% |
60% |
|
Have taken a step to address the possibility of outliving life savings |
83% |
53% |
|
Have a specific plan to pay off debt |
79% |
49% |
|
Have inflation factored into your financial plan |
69% |
48% |
|
Have a plan to address health care costs in retirement |
69% |
38% |
|
Will have enough to leave behind an inheritance or charitable gift |
64% |
33% |
Source: Northwestern Mutual
Advanced savings frameworks and the asset waterfall
Reaching a multi-million dollar nest egg requires tracking progress against clear milestones. Widely used benchmarks call for saving one times your annual salary by age 30, three times by 40, six times by 50, and eight times by 60. Hitting those targets means having a deliberate hierarchy for every dollar of incoming capital.
A practical sequencing framework, often called an asset waterfall, works as follows:
- Capture the Corporate Match: Maximize 401(k) contributions up to the employer matching ceiling before directing money anywhere else.
- High-Interest Debt: Pay off any revolving debt carrying an interest rate above 7%.
- Maximize the HSA: Fully fund a Health Savings Account to take advantage of its triple-tax exemption.
- Fund an IRA: Maximize annual contributions to a Traditional or Roth IRA based on tax bracket and eligibility.
- Max the Unmatched 401(k): Return to the primary workplace plan and contribute up to the full legal limit.
Modern safe withdrawal rates and distribution risks
Building wealth is only half the challenge. Converting a portfolio into reliable retirement income requires navigating sequence-of-returns risk. A severe market decline in the first three years of retirement threatens portfolio longevity far more than the same decline fifteen years in, because early losses reduce the base from which the portfolio must recover. A flexible approach such as the Variable Percentage Withdrawal system, which adjusts annual spending in response to actual portfolio performance, can address this more effectively than a fixed 4% rule applied mechanically year after year.
Navigating the advisory landscape
Working with an advisor does not mean a single, one-size-fits-all relationship. The landscape offers options calibrated to different levels of net worth, portfolio complexity, and personal preference.
- Robo-Advisors: Well suited to early accumulation phases, offering automated rebalancing and tax optimization for fees around 0.25% of assets under management.
- Flat-Fee or Hourly CFPs: A strong choice for hands-on investors who want a one-time planning blueprint or an independent second opinion, typically priced between $1,500 and $3,000.
- Traditional AUM Advisors: Designed for households managing complex estates, trusts, and business structures, with fees that typically scale down from 1% of assets under management.
Fiduciary Verification: Before committing to any advisor, check the SEC’s Investment Adviser Public Disclosure database or FINRA’s BrokerCheck to confirm the advisor operates under a fiduciary standard, legally binding them to act in your financial interest rather than their own.
Advisors do not simply offer tips on where to put your money. They help build and maintain the full financial infrastructure that makes saving, investing, and eventually spending that money in retirement actually work. If you want the habits that lead to a financially secure retirement, the data makes a compelling case for starting that advisor conversation sooner rather than later.
Editor’s note: This article has been updated to reference Northwestern Mutual’s 2026 Planning and Progress Study, which confirmed the $1.46 million retirement “magic number” and added new advisor-impact data showing that Americans with a financial advisor plan to retire at 63.7 on average versus 66.1 for those without one, and that 74% of advised Americans expect to be financially prepared for retirement compared with 43% of unadvised Americans. A finding from the Allianz Life 2026 Annual Retirement Study, showing that 67% of Americans now fear outliving their savings more than death, was also added for context.
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