Americans now think they will need at least $1.25 million in order to retire comfortably, up 20% from a year ago, according to a survey by Northwestern Mutual.

Having more than $1 million saved for retirement will be a pipe dream for most Americans, as they have an average of $86,869 saved for retirement, 11% less than 2021.

Inflation and increased spending following the pandemic are also prompting people to push up their retirement target age to 64, up from 62.6 last year.

Inflation and market volatility are weighing heavily on retirement savers’ and seniors’ minds, says Christian Mitchell, chief customer officer at Northwestern Mutual.

“These factors are leading many people to recalibrate their thinking about how much they’ll need to retire and how long it will take them to get there,” Mitchell says.

The extreme market volatility of the past year has devastated many retirees’ and near-retirees’ savings. A typical 60/40 portfolio with 60% of the holdings in stocks and 40% in bonds is on track to deliver its worst performance in 100 years, according to Bank of America.

At the same time, despite rising interest rates, banks are still paying customers nearly nothing on savings accounts and certificates of deposit.

Not surprisingly, nearly 20% of people now want to retire later, with 59% of this group saying their main objective in doing so is to save more money. Forty-five percent said they would delay retirement due to rising health care costs or an unexpected medical cost.

“It’s a period of uncertainty for many people — driven largely by rising inflation and volatility in the markets,” Mitchell noted.

Forty-three percent of Americans are fearful that they will not be financially prepared to retire when that day comes, and 33% agonize about outliving their savings.

A full one-third of Americans expect to live to 100, but 42% think Social Security could one day become insolvent.

Regardless of Americans’ fairly high awareness about the importance of retirement savings and preparedness, 36% have not taken any steps to ameliorate their fear of outliving their savings.

The Harris Poll conducted the online survey of 2,381 adults for Northwestern Mutual Feb. 8-17, 2022.