Do I really need $2 million?
You’ve probably heard the claim that $2 million is the magic number for a comfortable retirement in the U.S. But is that true? The reality is, there’s no one-size-fits-all figure. Your ideal retirement savings depend on your income, lifestyle, and personal goals.
Retirement Benchmarks: What the Experts Say
A 2024 study by Northwestern Mutual found that Americans estimate they need $1.46 million to retire comfortably. However, this is based on a survey of 4,588 people—it’s not a universal target.
Financial institutions offer more personalized benchmarks:
- Fidelity recommends saving 10× your salary by age 67.
- T. Rowe Price suggests you’ll need 7.5 to 13.5× your pre-retirement income by age 65, factoring in Social Security. High earners, who receive a smaller portion of their income from Social Security, should aim for the higher end of this range.
How to Estimate Your Own Retirement Number
If you want a tailored projection, try online retirement calculators like NerdWallet’s. Simply input: Current age, Pre-tax income, Savings, Monthly contributions, Post-retirement expenses, Other income sources
A Practical Rule of Thumb
If you’re unsure where to start, aim to replace 75% of your pre-retirement income. Research suggests a range of 65% to 80% may be appropriate, depending on your spending habits and financial situation.
Start Planning Early
If you’re still building your nest egg, basic calculators can help you stay on track. However, if you’re nearing retirement, consider using more sophisticated tools or consulting a financial advisor. Planning early and adjusting regularly will help ensure a comfortable and secure retirement.
So, How Much Do You Really Need to Retire?
The answer is—it depends. The amount you’ll need varies based on your expected retirement expenses, guaranteed income sources, and financial assets. Everyone’s situation is unique, so it’s important to create a personalized plan.
If you’d like to discuss your retirement planning, feel free to email me at info@kamitanifs.com. I’d be happy to help you map out a strategy for a secure and comfortable retirement!