Kevin O’Leary, the outspoken Shark Tank investor and entrepreneur, isn’t one to hold back when asked to share his two cents.
But if you’re asking Mr. Wonderful for his advice, just be prepared: he’s not going to sugarcoat it.
In a 2023 segment of Good Morning America’s Swimming with the Sharks, a concerned caller from New York asked O’Leary what percentage of her salary she should be investing in her 401(k) given that she’s not sure she can comfortably hit the recommended amount with all her other living expenses to account for.
“The number is 15%,” O’Leary immediately retorted, “And yes you can, by stopping buying all that crap you don’t need.”
Sure, it sounds simple. But as the caller and many Americans like her know personally, that doesn’t mean it’s easy.
Along with the COVID-19 crisis came a financial one. While the government moved quickly to support U.S. workers with stimulus checks and student loan forbearance, all that effort — along with supply chain issues and conflict in Europe, among other factors — eventually led to the highest inflation the country had seen in 40 years.
While inflation has since receded to a more manageable 2.6% in October, prices are still elevated and Americans’ budgets remain stretched. And their retirement accounts are suffering for it.
In fact, a 2024 survey of working-age Americans revealed that 73% of respondents say inflation has them more concerned about retirement. And 55% of them worry they won’t achieve financial security in their golden years.
Part of the problem may be that how much Americans feel they need to for retirement has also undergone some inflation in the last few years. In fact, according to a study from Northwestern Mutual, that “magic number” is now growing faster than the rate of inflation. As of 2024, U.S. adults say they need $1.46 million to retire comfortably — up 53% from the $951,000 they felt they needed in 2020.
However, with an average savings of just $88,400 according to Northwestern, working Americans are left with a $1.37 million gap between what they think they need and what they actually have.
Read more: Cost-of-living in America is still out of control — use these 3 ‘real assets’ to protect your wealth today