Millennials' new retirement number? $1.8 million (or more!)

Millennials have more than enough financial worries. Now they can add about 2 million more to their list. That's how much many might need to save to retire.

Older Millennials — those born in the early 1980s — will need about $1.8 million salted away to maintain their standard of living in retirement while younger Millennials — those born in the late 1990s — will need upwards of $2.5 million, according to various studies, estimates and experts.

To be fair, that equation makes two big assumptions. One, it assumes they'd need to generate $30,000 to $40,000 in annual income from their nest eggs in today's dollars. And two, it assumes a 2% inflation rate, which is currently the Federal Reserve’s target rate.

So why do Millennials, aka Gen Y, need so much set aside? First, there’s the issue of inflation. Assuming a 2% inflation rate, a $1 million nest egg today would be worth about $530,000 in 32 years, which is when Millennials now in their mid-30s are expected to retire, and roughly $386,000 in 48 years, when the youngest Millennials are expected to call it quits.

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What does this mean? Millennials who are behind the eight-ball will have to start saving aggressively now if they aspire to have the same standard of living in retirement as they did when working.

Why? One, they are unlikely to have a pension plan as did their grandparents. Plus, their Social Security benefits are likely to be less generous than today's. And if all that wasn’t reason enough, Millennials are projected to live even longer than current retirees.

The oldest Millennials, assuming they have no money set aside today and that they earn 5% on their investments, will need to sock away $2,000 a month for 32 years to accumulate a $1.8 million nest egg. And the youngest Millennials would need to save $1,000 a month for 48 years to accumulate $2.4 million.

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The really bad news? All this math changes if you need more than $40,000 per year from your personal assets in today’s dollars and if inflation runs at 3%, the long-term historical average. In fact, that person would need at least $3 million in their nest egg, says Michael Lonier, a financial adviser with Lonier Financial Advisory in Osprey, Fla., who was quick to add: “Glad I’m not 35.”

Just how much?

The youngest of the Boomers, those born in 1964, would need $1.3 million earmarked for retirement. A Gen Xer born in 1975 would need about $1.6 million. The figure for a Millennial: $1.8 million.

Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch. Got questions about money? Email Bob at rpowell@allthingsretirement.com.