How Much Do You Really Need to Retire Comfortably?
The "you need $1 million" rule is a myth. Your number depends on your spending, timeline, and Social Security income. Here's how to calculate yours.
Financial Writer
The 4% Rule
The most widely cited retirement guideline says you can withdraw 4% of your portfolio annually in retirement without running out of money over a 30-year period. Under this rule, a $1 million portfolio supports $40,000/year in withdrawals. But this assumes a specific historical return profile and may need adjustment for today's environment.
Your Number = Annual Spending × 25
If you need $60,000/year in retirement (after Social Security), multiply by 25 to get your target: $1,500,000. Need $80,000/year? Target $2 million. This is just a starting point — actual needs vary by health, housing, and lifestyle.
Don't Forget Social Security
The average Social Security benefit is about $1,900/month in 2026. For a married couple, that's $2,600–$3,400/month. This dramatically reduces how much you need in your portfolio. Use SSA.gov's My Social Security to see your estimated benefit.
The Lifestyle Variable
People who retire with paid-off homes, modest cars, and geographic flexibility need substantially less than those maintaining expensive lifestyles. The biggest retirement planning lever isn't investment returns — it's spending.
Comments
No comments yet. Be the first to leave one!