How Much Money Do You Need to Retire?

Over the past several months, JD over at GetRichSlowly has been running a poll that asked the following question:

If you were 65 and retiring today, how much do you think you would need?

How Much Money Do You Need to Retire?Interestingly, 42% of respondents said they’d need over $1M, and 27% said they’d need more than $2M. At the other end of the spectrum, 8% thought they could get by on less than $500k.

If you assume a safe withdrawal rate of 4% (as many do), then a $500k nest egg would throw off an inflation-adjusted $20k/year. At $1M, we’re talking $40k/year. At $2M, it’s $80k/year.

What do you think? If you were 65 and retiring, how much would you need?

72 Responses to “How Much Money Do You Need to Retire?”

  1. I have a hard time relating to most comments on this thread. Here is reality for great number of boomers! $1200 a month before Medicare deductions. I am in better off than most folks I know because I also have $30k in a safe deposit box. So, it all depends on your standard of living. I have been living comfortably in Portland, Oregon metro area on $400-500 a week take home pay for the past 3 yrs. and was still able to save $10k a year. So I feel that many of you folks really need to get a grip and realize how fortunate you are!

  2. I am screwed! I am reading all these posts and do not have anywhere close to that kind of $. I have a 86K equity loan. no mortgage or CC debt and $380k in savings and retirement. I am 58 years old. ughhh

  3. I hope you ir the wide have a pensuon because 1 million won’t get you far. I’m in you’re boat so I am not criticizing . I’m pretty scared with approx 3.4 and a paid off house . Anything cam happen om 20 or 30 yrars. I woukd give back every penny for a pension od say 50,000 plus cost of living increase plus ssi at 13,000 a year wjth cost of living . Yet I think the Republicans abd the Koch brither will try to destroy ssi befire o ever see it

  4. I hope you are right because I think without a pension. And tge,Republicans forever trying to get rid of ssi I think uou better rethink that 3 million and maybe put that at 3.5 , ssi if it’s there and paid off house. You put that in with only 4000 a month plus ssi and you will see with 3.5 inflation you probably need every bit of that 3 million , rhan where will you store it. If 1 million is invested and you take a market correction late in lof yiu might have a problem even with all that
    Listen give back the 3 milluon and hope for a pension iys worth more thsn rge 3 million

  5. It’s the pension that saves you . Withour a pensuon you would be finished even with a lousy 700,000 in cash ,300,000 in annuities. The pensuon is guaranteed for life and probably has cost of living inceases. The Koch brothers aMD the Republican party would love to kill you’re social security like now. In fact they have been trying to kill ssi for decades . Both parties have ribbed the fund and there is a whole workd out there wondering if they wlll ever see that benefit . Watch America go back to midevil timrs when we live in a country of 85% poor, 10% okay and 5% ungodly wealthy. Thry will be so hungry and living in the streets . You marl my words . This is not coming from a jealous poor man . This is what America will be. Wait till milinius witour pensions wake up like the guy who os 61 ,saved for 25 years abd only has 250000. That giy thinks he will work till 80 . No chance. If America wants to survive the big corps wiuld ha e needed to spread the wealth but we know that won’t happen
    You wait war will come to American shote and the country will destroyed because it’s depleting middle class will be wipes out and I can assure the poor won’t defend the rich and all their wealth

  6. Anonymous

    I have read all these comments and it all seems to come down to one big factor. If you or you’re wife have a pension. This is not coming from a slacker. I retired and admit i wish i did not at 53 . I am now 54. I have approx 1.6 mil in real estate, not including a house paid off and valued at 1.1 mil and 1.9 million in cash and about 570,000 in limited partnerships. The catch in all this goes deep. I cannot use the house as investment but could downsize or reverse mortgage someday but would like not to move and remember uncle Sam will want 35% capital gains from this house. Some points I would like to make. 1.The rentals which is the 1.6 is after tax money and it creates about $80,000 after tax income but as you know being a landlord has nothing to do with the word passive income . You work for this and hope some liberal skank lawyer does not help some dirt bag sue you in the to liberal state of California. 2.I hope to put about 1.4 of the 1.9 into a diversified portfolio. than

  7. Anonymous

    It’s very difficult to accumulate that much money for most of us. That being said, living along time is not an option.

  8. Anonymous

    I’m only getting $601.50 retirement and I Only get 22.50 from my husband a week and that is it .i leave with my daughter and I really don’t like her buy. Me food and what ever I need . I’m 75 years old .is hard for me to work at school .im only sub so I really don’t make much .i don’t used Mobil phone .i can’t offered that .

  9. Anonymous

    Well my husband and I tried hard and started young shared a car and a $250 walk up. He worked 7 days a week and now at a fairly 52 young age have a 4.5 million networth by investing in dividen paying blue chips and tax free bonds, we have a few properties and we live solely on dividends. We wear 20 year old cloths comfort first and go to matinees. We hope to enjoy and guide our Grandchildren and enjoy the simple things. It’s not how much you make but how much you spend. We splurge when we want but are happy just being together. Everything in life is a risky trade off. Make sure your willing to give to get. Enjoy life and with SS and $750,000 in decent investments no debt one can smile. Bless All.

  10. Anonymous

    2 Million still isn’t enough with our economy headed the way it is. I had NO debt, and was affording it on my own with out state assistance. Just bought my first place and am afraid of loosing it and ending up where I started from. I am a working woman and trying to set an example for my adult children, but struggling. I have every thing I have on MY OWN, No divorce < No inheritance… All on my own for the last !) years. But Im worried about now and leaving it behind for my children. Gotta be stronger.

  11. Anonymous

    Being in debt in the past, was best to get out of debt. Some say it’s fine to be in debt. I got out of debt and paid my mortgage when it was @ 9% interest. It was very wise then to get out of debt. I did that. Now I plan on purchasing my final home and will get a mortgage and low interest and leave my $1.5M nest egg alone. My wife and I get over $3,200 combined SS and a combined pension of $3,800. So I am fine with debt of a mortgage. If the market appears to be in trouble I may take a lot of the profits and pay down the mortgage instead of loosing a lot of profit I made over the last five years. It’s all a balancing act. Good luck to all.

    For those only receiving SS as a means of income in retirement. To live a nice retirement with under $1m in a nest egg is doable but need to make a budget that works. I delayed my SS for a year. Realizing I could invest it at better than 8% I am taking it in 3 months. We are now living the dream. Wintering and renting Luxury condos in Florida or wherever we want to go. Doing anything we want to within reason. We are blessed.

  12. Anonymous

    If all these predictions of needing 1+ million dollars in retirement savings is true then baby boomer retiree’s of this country are going to be in a world of hurt! It’s a very very said state of affairs. I am 60 years old no debt including no mortgage, I have 650,000 in 401k and IRA retirement savings and at 62 the wife and I can collect 2,850 in ss and that’s it folks, that’s what’s going to have work for us cuz I’ll be damn if I’m working until I’m 65! And oh by the way, waiting until your 70 to collect SS is crazy! why would you do that? Heck after 75 you’re not going to have the energy to do the fun things you use to and hell you could keel over at any time after that. Your spending is going to be lower….and yes, you’ll end up spending the extra on medical, oh well, at least you have had fun while you were young enough to have fun and you’ll have medicare haha maybe. The waiting idea on ss is something the government is pushing because they don’t want to run out of money with all us boomers retiring at the same time! Bottom line pay off dept, control your spending and save as much as you possibly can and get out sooner than later with no regrets!

  13. Anonymous

    So I’m 47 , and also saving hard for retirement, but have to laugh at all these people who think they are actually going to live to see 85 or 90 years old .Good luck with that

  14. Anonymous

    My wife and I just retired… In NY state where things cost just a little bit more…. My financial adviser has set us up in mostly conservative instruments with an average rate of return the last 2 years at around 5.5%…. The house is paid off and we are completely debt free….. With 2.5 million, and living conservatively (dinner out a couple of times a month, nice vacation, and some self indulgences) you could live very comfortably…. You can’t go to Vegas and blow 10k, you can’t buy a Bentley so you have to settle for a Caddy or Mercedes, but you can live nice and have a good time…. As long as they don’t wreck the economy more than they have the last dozen years… 🙂

  15. Anonymous

    Those of you who advocate retiring with no debt have it all wrong. I have over $1.5M net worth with about 230K of debt, including home and over $1.0M in investable assets. My portfolio gains about 16% per year, 70% of which is in retirement funds, which are tax deferred. My mortgage is a 2.625% ARM. Why would I pay off my home loan when I’m making 14% arbitrage between the portfolio and home loan? I’m in the 15% tax bracket income wise, so a large portion of my capital gains and dividends are taxed at 0%. Homes are a lousy investment compared to stocks long term,so why put most of your net worth into a house when the market will yield you so much more?

  16. Anonymous

    Lexington Loan Service, we give out loan to an Individuals, Firms and Cooperate Bodies even those with Bad Credit History Depending on their Marital Status, Sex, Religion, and LOCATION but must have a legal means of repaying back the Loan at the Stipulated time, AND MUST BE TRUST WORTHY.

  17. Anonymous

    I like what JS said. That’s the American Spirit. Make a plan and execute the plan. It can be done! While I’m all for helping others in need that only comes when they try and help themselves. Folks like JS should not have to subsidize others who waste their income away. A dear relative of mine,now deceased, lived on $18,000 per year, never taking a hand-out for food stamps, health care or living expenses. They took pride in being self-sufficient. We need for more Americans to accept responsibility for their future and stop asking the government to take care of them. If they think they desire it they probably don’t!

  18. Anonymous

    As J S Says it is doable for anyone. My wife and I have done it with both of us only having high school diploma. I have retired at 58 and she still works for two more years making about $100k . I have no pension, living on my wife’s salary we have accumulated 1.25m easily retiring in two years on a great income from wife’s pension and SS. The youth today want it all without the hard work required. At least most youth do. Take it from the college graduates in the note preceding this and especially my wife and I who only made it through high school. We are now millionaires only did this all on our own. No freebies or help from parents. SACRIFICE IS THE KEY. I made about 80k when I retired and wife made about 75k. So people it is real and doable. We lived below our means.

  19. Anonymous

    Acquiring $$1 to 2 million in America is still doable for anyone willing to apply diligence and self-control over a life time. The problem with 99% of Americans; no one is willing to make the sacrifices. We’ve become a nation of immediate gratification, a “I want it now” society. We are now divided; those who have worked for it and those who are envious and jealous. America hasn’t changed, the people have.

    My wife and I are living proof of this fact. With no help from anyone, we put ourselves thru college (Me- M.S., My wife- B.S.), paid as we went. With time worked our way into better paying jobs and always managed to save a little $$ along the way. Today, we are setting on $1.2 M pre- and after-tax savings. We are still working; my wife is a medical professional making $90 K/yr. I am an environmental Professional making $145 K/yr. We banked ~$65 K cash last year! The funny part; when we met, she was driving a catering truck with no HS diploma and I worked in a truck dealership as a parts runner for $3.50/hr. We also managed to somehow raise two children along the way who are really good solid citizens!! Truly, we are living proof the dream is possible!

  20. Anonymous

    Ok I am 61, retired. Will collect SS at 62. Wife still works and retires in a year or more. Will invest all my SS income in high yield stocks that will return dividends of 10% or more. There are plenty out there if you look. I have $1.2 million in retirement savings. My wife and I will live on a combined income of $75,000 from both Social Security and Pensions. We will only tap into our retirement for yearly trips and major luxury purchases. Our typical expenses were much less than the $75,000 we will use for retirement. We were and are middle income wage earners and never carried debt in all of our lives outside a mortgage and car payment. We save much like the note from “Not Worried” above. It can be done. I personally do not know anyone that is in the same position I am but it was and is doable. Dave Ramsey says it like it should be. We have been living Dave Ramsey’s code all our life without ever knowing who he was or didn’t even know about what he preaches about getting out of debt. We are considered millionaires under his definition but would never put myself in that category. We just don’t spend like one or live like one. We are the common Joe next door. I am grateful that we were never burdened with tragedy and good health. We are Blessed. Our goal in retirement is to travel and give away our accumulated wealth to those in dire need. In our travels we will seek out those who truly deserve a helping hand. The reward will be great

  21. Anonymous

    Fig333….really…?…you have NO savings at age 55….you took out an interest only loan expecting the value of the home to only go up ? AND YOU blame all the people that sold you this gig ? You’re and idiot….That’s why you’re broke.

  22. Anonymous

    Am 55 years old. Do not have a pension. Do not have any money saved up. Have a 399,000 interest only mortgage that expires in eight years. I make 60,000k a year. I thought my house would appreciate in value when I took out the loan in 2004 but it is worth less than what I currently owe on it if I could payoff the loan which I can not. Most of the people I know are in a similar situation. Looking back on how I and people like me got into this situation stems from the useless bums in congress that allowed the banks and financial people to manipulate and enable credit default swap investments that were worthless. Have you noticed not one person of the thousands upon thousands involved (including the regulators) have been prosecuted or charged. I also took the time to look at the political donations made by Fannie Mae and Freddie Mac and other large culprits in this scheme! Both democats and republicans are totally dirty in this crap.

    I am happy for people who have positioned themselves well for retirement. I am not happy with the bottom deck dealing our elected officials did and continue to do at our expense. I take responsibility for not saving enough up to this point but I also sought the facts to determine why things have gone so badly for home owners since 2007 since a lot of our wealth is tied up in our homes. Bottom line, your elected officials screwed you. Never forget that and vote accordingly.

  23. Anonymous

    I am retired, only get 1250. a month from ss.Wife still works but I have it figured at 32000. a year when she does retire.I paid off all my depts before I got forced into retirement, by a layoff.No more factory jobs in this area of country and the few that were open, seemed to me they did not want older workers, their loss,I had worked for alot of years.I think that we will be fine. I always could save money, but is harder now days.Maybe if I have trouble making ends meet the people that I helped make it all those years can return faver, What do you think? I am not holding my breath!! One other thing I do not know anyone that has a millon in their retirement plans most have told me that is because the cost of everything in our country is getting out of control.

  24. Anonymous

    I am 61 retired, no pension, $700K 401’s. Wife works, makes $90k yr. Has $350K 401. Yearly Expenses over the last 5 years averaged $45k-$50K. No mortgage, no debt. Lease cars and will always do so, It’s our way of life and is figured into our future budget. Wife retires in 1 yr. Yearly income from SS and her pension will both total about $67K. No need to tap our 401’s, for quite sometime. We also have 3 annuities that will generate approximate yearly incomes of $15-$20K per year in about 8 years. Based on that we should be able to live above our current means and once in a while treat our selves to elaborate vacations while only slightly drawing down our 401’s.
    We set up our plans about 15 years ago, I was a blue collar worker, my wife a stay at home mom until children in teens. She then got her Bach Deg and is now in a good paying job with a good pension. All it takes is discipline, live below your means and not waste extra money or take out unnecessary loans. Never carried a credit card balance in 40 years. Don’t need millions upon millions saved to live a fruitful life style.

    My wife and I have been married over 40 years, never got an inheritance. Everything we have was from hard work and diligent saving. MAXING OUT 401 when we could. We took at least 2 vacations every year and may long weekend outings. Shopping for the best deals, using air miles, etc. It can be done and still maintain a quality life style. But not above our means. Never played the game of keeping up the JONES. Always anew auto every 3 years for the last 35 years. Against the grain of may financial people but we lived our lives that suited our needs. Worked fine and still works fine. And we are still in great financial shape.

    My wife and I are in a great position because we put ourselves there and many of our friends think we have a great inheritance behind us but I turn it on them and said you could have been in the same position if you planned a long time ago.

    Many young people today have no idea what their financial future should be like and have no concept of preparing for it. I have two adult children that think it’s too far away to worry about.

    Many young people think that the government will take of them with the Liberal mind set most have today. Unfortunately the government as we know is spending far more than they are taking in. Taxes will sky rocket in the near future and inflation will rise to double digits. There is no other outcome with this administration in power. God Help Us. As we can’t do it.

  25. Anonymous

    For everyone reading this here is one good rule of thumb to help in your retirement planning. It has helped me over the years (I’m currently 60 and in retirement). Take the annual amount of money you think you will need in the first year of retirement and multiply that number by 20. This is equal to living on 5% of your savings (no principal reduction). While this may not fit all situations (e.g., inflation, taxes, medicial care) it is a great way at any age to see if you are on-plan or off-plan toward your retirement savings. Also be realistic as to what you think that first year of retirement income needs to be net of Social Security or other annuities. If you are within 10 years of retirement look at what you spend today and project that into the future. Younger folks it will be more difficult given the long time horizon. But remember there is no substitue for good financial planning within the last 10 years of ones working life but if you follow this one simple rule you’ll be in reach of a comfortable retirement. Other things to consider in this 10 year working window is health condition or expected longevity, taxes (living in NY is more expensive than ND), think where you want to live, health care costs, long-term care. Also don’t factor in your home equity into your retirement savings. You’ll need a place to live and I don’t like reverse mortgages. All of these can drive one to exhaust their retirement savings. It’s hard to plan for the uncertainity that life throws our way but if you can muster 20 times expected annual retirement income you will be far ahead of the masses as you enter retirement. Cheerio!

  26. Anonymous

    @Cheapo. You have a few years on me, but I share your exact concerns! The only advise I could offer is: “Being Rich is having money, being wealthy is having time.” (Stephen Swid)

    As we get older we can’t let our fear consume our time. This is something I struggle with daily….

  27. Anonymous

    I can guess at a number but I really don’t know the answer to this question. The amount “needed” to survive or get by and the amount needed to really enjoy retirement and be able to do a few things are clearly two different numbers. At age 49 with no mortgages, no debt, kids college already paid, this topic is something that I speculate on and even worry about every day! My largest monthly expense is health insurance.

    Given our country’s debt, I really fear higher taxes for all in the future. Taxing the “Rich” won’t do it! Besides, politicians keep changing their definition of “Rich”. It will take some middle class tax increases and lots of cuts to make a real difference. I suspect that, within 15 years, before I get to Social Security eligibility age there will be reduced benefits and/or means testing. So those of us who have prepared for retirement, will probably be penalized for having done so and will get a reduced benefit if we get any benefit at all. So I probably need to save/invest even more than initially anticipated! Currently on track to hit well over $3M within the next 5 years and I am still scared to death, fearful and uncertain about the future…

  28. Anonymous

    @Cheapo…….First of all, we have no “Leadership in Washington” and I don’t believe you and I will live to see the day when that might even happen.

    But I feel that with what you have accomplished, you and your family will do just fine. Whether you want to retire is your business and only you know that answer. Now all you need to do is keep the government from stealing what you have saved, and hope to not be so unlucky that all your savings goes to divorce lawyers, nursing homes, and other assorted hazards out there. Also hope that your kids are smart enough that if you share with them now instead of when you are dead, they will use their gifts wisely.

    So as you can see, there are still plenty of things to worry about. Isn’t life grand?

  29. Anonymous

    I’ve been working for 40 years (soon to be 63) making “Middle Income” money. I spent my life NOT buying a new car every 3 years, NOT running up credit card debt, NOT eating out every other night and not taking lavish vacations twice a year, (OK, maybe something extra nice every 2 years) and I paid for the college education of 2 children. As a result I have $4mil in the bank and investments, not counting the value of my house which is paid off. I have no debt and I’m still not sure that I’m going to be OK in retirement, reason being I don’t trust congress to do anything about the SS fund or health care costs. So I’m still working at a sucky job. I’d like to retire, but the lack of intelligent “leadership” in Washington has me feeling very unsure about the future.

    I guess I could retire, but I’m not sure if there will be anything left at the end for the kids so I’m hanging in. My ultimate goal is to live off the interest and dividends from my investments and keep the principle reasonably intact.

    Does anyone think that’s plausible?

  30. Anonymous

    You are all very lucky. I am 59, and have only about $180,000 saved in retirement accounts; this despite having saved for 25+ years, and invested just as all the conservative advisers have advised. 15% of my income, year in, year out. I’ll need about $30k net in today’s $s. I will get $1k/mo. at age 62 in s.s. payments, so will need $18k per annum minimum from my portfolio. Which means I need about an additional $400k… not encouraging, in this investment environment. My health is declining, so the idea of having to work for another 15-20 years is daunting, to say the least…

  31. Anonymous

    As a married couple we will retire at ages 62/63 with social security benefits, both starting early will get a total of $24,000/yr. Our expenses equal about $50,000 living comfortable with ZERO DEBT. On top of our social security benefits we will also be getting an additional $34,000/yr in pensions total of $68,000/yr without tapping into our $700,000 retirement savings plus another $300,000 in annuities that will not start tapping for another 10 years. We may never have to tap our $700K retirement savings for another 20+ years into retirement which then may equal over $1million.

    I think we will do much better than we ever expected we could have. We are blessed.

    For those blue collar workers, I was one. They can do the same if you are diligent in maxing out your 401’s and IRA as soon as you are able and reduce your debt as fast as you can.

  32. Anonymous

    This is something that will work for me with no guilt just gratitude. I am partialy disabled collecting a good social security benefit + Welfare however very little SAVINGS. My wife and I or I should now say X-wife now got divorced (on paper) before I went on disability and welfare, so we can live a better financial life on OBAMA’s ticket. We still live as husband and wife, she works a good job and will get a decent pension. I have a twin brother who is extremely wealthy and as has probably $2.5M in his 401/IRA. He was never married and we are as close as twins can be. He has about 2 months to live. He recently told me that I was his sole beneficiary. I had him change the beneficiary to my X-wife instead and this may not be so moral but I asked him if he would go through the process of marrying my X-wife thus making her the surviving spouse of his retirement pension and get her a the max in Social Security. He agreed as he realizes my x and I have done a great deal with him over the years and we a caring for him in his last days. His gratitude is doing this for us. In time my x and I will marry again and live a fantastic life thanks to my dearest twin brother. My wife and I struggled most of our lives, my brother helped when he could and he lived an elegant life. He says in his deathly state that it’s my turn. So in the end by him marrying my wife she will get all of his pension, retirement of $2.5M and his Social Security Benefit. In about a year I will give up Unemployment and Welfare after we get married as I won’t need to milk Obama any more than I have to. But I thank my dear bro for helping us out. Nothing here is dishonest just a way of doing business. No guilt here. I love my bro and we are doing all we can for him. He still works and said he will until the day he dies. Fortunately he has a great health insurance plan.
    With the pensions my wife will be getting and Social Security our income alone will be about $120k/yr without even touching the retirement savings. That works for us. Our divorce is on paper and we still live together and will be celebrating our 45th anniversary together. Thank you very much bro.

  33. Anonymous

    Well, I guess I will be poor. I am going to retire next month with only a 100k saved. I do have two government pensions in addition to social security, so I won’t be making too much less than I am now working. It would be nice to have 500k or a cool million, but I am pretty sure that I can make it within altering my life style any.

  34. Anonymous

    I shocked by many of the comments. I can’t believe anyone would plan on having a mortgage or student loans till they are 65—and even waiting that long to retire for that matter. I guess if you love your job, I can see it….or I guess if you thought you needed that extra huge house, or had 8 kids, or like expensive new cars every two years….and lots of toys and electronics.

    We are 46 and have 1.35 M net worth right now and did the math to easily retire right now based on our modest living standards. However, the plan is to wait 6 years simply because I really love my job and in 6 years I will qualify for low cost health insurance benefits. I can afford to pay the extra now for health but but might as well just take it.

    Remember this simple fallacy that many people forget and retirement calculators neglect. If you are putting 20% of your income away, then you certainly don’t need to live on 100% of your current income when you retire. It would be no greater than 80% to live on because you are already doing it now. I put away 50% of my income and therefore, I can easily live on 50% when I retire. That will lower my taxes and actually be effectively more.

    This whole notion of needing several million dollars at age 65 to me means you are going to go hog wild spending money on campers or boats or something at retirement. I thought once that I needed $3 million but I figured out the spending side of the equation is just as important as the saving side.

  35. Anonymous

    I am 50. My husband is 57. I estimate $600,000-$700,000 is what I will have in 10 years.No mortgage,with no obligations.Can I retire and be okay,in 10 years? I want to retire with my husband. We are at $300,000 right now,and he has a $700 mo pension. Am I dreaming too big?

  36. Anonymous

    That number one says of only 2.9 million people have a net worth of $1 million seems a little bit low out of the hundreds of millions qualified. I am not sure that survey is good. I was only a high school graduate who made it as a 33 year company man as an hourly employee and it wasn’t difficult for me over those 33 years to accumulate the wealth having a combined net worth of $1million. That’s combined with my wife who also worked only 20 years at a meager salary. We earned every penny with no inheritance or freebees along the road. So with a little sacrifice it’s very doable. I think there a lot more than 2.9 million people that have this kind of wealth. Much much more.

  37. Anonymous

    Although its obvious that everyone’s amount is dependent upon their income/expenses in retirement I think its great to have a plan. I don’t think many people do but once you have a plan you can make financial decisions to achieve the plan and maximize your retirement enjoyment. I’ve had to revise my retirement age (older) based on my recent investment performance and reducing its future expectations.

  38. Anonymous

    I think it is funny how everyone is talking in the “millions”. Here is some interesting information….in the US, there are only 2.9million people out of 350m people in the country who have a net worth of 1m or more! Secondly, there are only 10million people IN THE ENTIRE WORLD who have a net worth of over 1 million US dollars! One can wish all they want, but ultimately most people will have to retire on much less unless they win the lottery. And to the people on here who are discussing 1, 2, 3, or even 5m net worths, count yourself very lucky! You are in the top 1% of the country and in an elite position by far in the world! We in this country just have a hard time realizing this. And finally, here is the scoop on these comments:

    1. If you are reading this article and posting, you are actually aware of planning for this and may have a better chance of making it to your goal.
    2. Most of the people reading this article because of number one probably already have a substantial net worth!

    So do you want my opinion? 1 million is still a very valid number. Especially if you move to retire to a lower cost area to live SINCE YOU DO NOT NEED TO BE IN THE CITY TO GO TO A JOB PAYING YOU THE BIG BUCKS!

    1 million will easily do the trick if you do not have to commute or worry about working for a living in order to save the 1 million in the first place.

  39. Anonymous

    I have 2.4 million in retirement acct, 190,000 in cash and 895.000 in a variable annuity. I owe 380,000 on my house and I am 62. I guess that comes out to 3.4 million. The only debt other then the house is my son’s 1,000 a month college loan he can’t pay for himself and I co-signed. I have no idea if I can retire on that yet or not. I think I want to try to work a year or two more. My ira is not a Roth either. I feel good about where I am but still dread having to start using this money.

  40. Anonymous

    I have 2.4 million in retirement acct, 190,000 in cash and 895.000 in a variable annuity. I owe 380,000 on my house and I am 62. I guess that comes out to 3.4 million. The only debt other then the house is my son’s 1,000 a month college loan he can’t pay for himself and I co-signed. I have no idea if I can retire on that yet or not. I think I want to try to work a year or two more. My ira is not a Roth either. I feel good about where I am but still dread having to start using this money.

  41. Anonymous

    it makes no sense to talk about absolute numbers. for you to never run out of money it’s very simple, you need 2 things.
    1. a place to live that is paid off
    2. investible assets of 25 times your current expenses.

    you then invest your assets in a balanced porfolio and you assume that long term you will be able to generate at least 4% of after tax return.

    so if your house is paid off and you need $100k a year to live, you need investible assets of $2.5m.

    this is why you must control your expenses, for every $10,000 a year you spend on dumb stuff, you need an extra $250k in after tax dollars in your nest egg!

    i have done the math a million ways, and this formula works.
    good luck everyone.

  42. Anonymous

    We have accumulated retirement plans and savings worth $1.2Million. We will retire at 63/62 me and my wife.
    This figure is far more than enough to get us into our 90’s with some to spare. We will start off with about $85,000 a year and increase our yearly income by about 2%. However our first 5 years we will only tap our 401’s by about 1%. With pensions at about $35,000 and combined SS at $35,000. I only need to tap our 401’s for about $15,000 which would be only about 1.5% of it.

    I have figured inflation and expect to have extra put aside for Health Care which we assume will cost us about $300,000 over our remaining life time.

    We have been blessed to be in this position. Good planning and saving at a young age put us here. Of course prayers were always a part of our decision making.

  43. Anonymous

    If you retire at 65 today, I would need $1M with no mortgage and no debt with Social Security. And if you live in your own house and have 200K raining money, you will be living very comfortably.

  44. Anonymous

    Guys you got to figure in a 3% annual inflation rate. I am 38 now and Could easily retire on $4,100 a month after taxes. Keep in mind I have $1,000 in that for medical insurance and out of pocket expenses given todays rates of medical care. To get $4,200 a month I would have to figure in another $750 in Fed Taxes and $250 for state taxes given 2010 tax levels and married filing jointly. So we are looking at $5,100 a month or $61,200 a year including tax in TODAY’S DOLLARS. As I am 38 I have 27 years before I am 65. Now at 3% inflation rate that $61,200 becomes $132,000 inflated dollars. Now the standard rate of withdrawal at 4% means I need a retirement account at $3,300,000 (3.3 Million)

    Another way to say that is $1.4 million in todays dollars will be 3.3 million needed to buy the same stuff in 27 years.

    Inflation should be our real concern. I am saving everything I can, but it is going to be an effort to hit 3.3 million. I don’t even want to run the numbers based on the money that has been flooded into the market by the FED. If we hit 5,6,7,8 % inflation in the next couple of years that will cause my 3.3 million to have to swell to 4.3 or even 5 million to buy the same amount of goods.

    We are in serious trouble in this country and the only answer may be to leave it during retirement years and go and live in another country where Medical sucks but the cost of living is really low.

    I really worry for all of us, and these comments above really show how blind we all are, totally forgetting about inflation in our calculations.

  45. Anonymous

    I am 60 years old and I think $1.3M will do it. I will be receiving $30k per year in social security payments at age 66(my planned retirement age), and of the $1.3M, $300k will fund an annuity paying $20K per year for the rest of my life. I will have to take insurance on myself of $500k to replace that $20k annuity if I die before my wife. I should be able to take 5% from the $1M balance every year. That’s $100k / yr… Surely I can live on that. The issue comes in if we live for more than 20 years after we retire. Costs could rise to 3x what we need today.

  46. Anonymous

    I think all of this 1-2M stuff is ridiculous. Do you think that everyone that is retired TODAY is a millionaire? My grandmother is 97 and has been retired for over 35 years. She lives in a nice apartment outside of a major city, survives on social security, medicaid and nothing more. No, she can’t go on a cruise every year, but we take her on family vacations and out to supper often. I know many older retired folks who have maybe a hundred grand in the bank or much less, living in comfort. No debt is the key. But in retirement, you’re not spending what you do at 35 – not even close. Just something to think about.

  47. Anonymous

    At 65 today, I would say that $1.5 million would be a good figure, in the absence of a pension. Sadly, this is not going to be possible for most people who are very close to 65.

    Of course this is all subjective, based on one’s health and spending levels.

    For those of us in younger generations, I would recommend saving early and significantly. Don’t count on social security, and don’t count on a pension. Expect to be on your own. Thus, the need to save early, invest wisely, and let money grow through compounding.

  48. Anonymous

    I retired 10 years ago at the age of 48. Before retirement, I built a financial plan to age 92. The wife still works part time as a substitute teacher, but we are able to save a lot of her earnings. I do have a small pension. I believe in using present value calculations of pensions and social security to come up with a meaningful estimate of assets available in retirement. Including savings, retirement accounts, and the PV of any pension + social security, I believe a person could manage with a $2M pool of assets. After 10 years, we are still within reasonable limits of being on target with our plan.

  49. Anonymous

    #13 Stacey says,
    “And if we switch to a consumption-based tax system, EVERYONE (Roth and Trad fans) will pay the same amount of taxes.”

    Are you assuming that a consumption-based tax (VAT) will be implemented instead of an income tax? If the consumption-based tax is levied in addition to income tax then traditional fans will still have the potential income tax liability.

  50. Anonymous

    I said this over at Get Rich Slowly, too:

    The big unknown is medical costs. If we get single payer in this country, my partner and I will probably retire at 40, because right now we’re over-saving in the expectation of spending our last few years needing the kind of care our grandparents needed at the end – memory care home, supportive living, and in the end hospice care. And these were extraordinarily healthy people, that’s why they got to be 90, 95 years old before they needed expensive medical support.

  51. Anonymous

    With unknown future tax rates,and inflation (both expected to rise rapidly in the near future),the value of the dollar sinking because of the Feds printing presses (with no abatement in sight), planning with any accuracy is improbable.

  52. Anonymous

    Daron – it’s not subjective. I didn’t just pick a number out of a hat! I have taken what I think we will need in retirement – replacing our current income. Dividing by 0.04 or 0.03 (like Ethan also suggested) gives me roughly a range of $3-5M. I’ve done several retirement calculators and they mostly give me the same number range too.

    The problem with planning for retirement while you’re still in your 20s is that you really have no idea how much you need. You can only guess, because of things like taxes, inflation, future expenses, market return and such. All you can do is make your guesses conservatively, diversify as much as possible, and try to save more than you think you’ll need. I’d rather leave a million dollar estate than run out of money before I die.

  53. Anonymous

    If the target withdrawal rate is 4%, as the post discusses, and one has the money to make that work for them, the total amount is immaterial, particularly when taking into account inflation since the 4% withdrawal rate implicitly does that for you. Just take what you need in retirement, divide it by 0.04, and that’s the number. Having ranges of $3 million to Z$5 million seems to be very subjective.

  54. Anonymous

    Ya know – the hubby and I are VERY frugal people…but you better believe we’ll be living on more than $20K, and even more than 37K per year when we retire! (so many things we want to do!) So we’re socking enough away in 401K and traditional IRAs so that we have just enough “taxable” income so we never break out of the 10% tax bracket in retirement. The rest goes into ROTH accounts (and last year, we maxed out both ROTHs, and we’ll do the same this year – while we are still *just barely* in the 15% tax bracket and have many years for the money to grow competely tax free. As we get closer to retirement and our yearly income grows to the point we break out of the 15% tax bracket, well start funelling money back into the traditional IRA).

    If we were to retire NOW – assuming NO debt (not even mortgage) and we’d actually get SSI, I would say about $1 million. But since we are just over 20 years away and don’t count on 1 penny of SSI, I’m aiming for a bit of a higher number 😉 But still strategically planning to have little to no taxable income in retirement. (Courtney, with the new health care pogram and all the other entitlement programs, I’d bet you’re right – taxes WILL increase!)

    Chris – that was funny!

  55. Anonymous

    $500,000 in today’s dollars – not counting on Social Security, but our current lifestyle means we’ll need about $20,000 per year. Thank you, small town life. 🙂

    Count me in as a traditional IRA fan, too. I had to explain to my financial advisor why a traditional IRA was best for us – that was a sign that we needed a new advisor! If the tax system stays the same (exemptions, deductions, ect) we won’t pay taxes. And if we switch to a consumption-based tax system, EVERYONE (Roth and Trad fans) will pay the same amount of taxes. I’ll take my deductions while I can get them.

  56. Anonymous

    Hmmmm, at first I thinking around $2 million. Then I realized that I’m going to start getting free health care in a couple years. Considering that and along with the really nice tax credits I’ve been getting, I just might be able to make it on $1 million. Wait a minute. I was just unemployed for a few months and realized people can get free food, free bus fares, reduced utilities, help with medical costs, help with housing costs, etc. And get this. I even found out some people can qualify for cold, hard cash assistance! Boy have I been living in the dark. So now I’m thinking maybe $250,000.

    Ok, sorry for the extreme sarcasm. Real answer – $1.5 million. Unless I move to Central America.

  57. Anonymous

    William Bernstein and Jim Otar have convinced me that the 4% rule of thumb is too risky. I use 3% for my expectations. Assuming no mortgage, I would need $1.5 million to produce $45k per year (that’s all after-tax because my retirement accounts are in a Roth IRA).

    If the first 5-10 years of retirement went well, then I may be able to move to 4%.

  58. Anonymous

    $728,000…not that I’ve put a lot of time into figuring this out. One quick way is to subtract Social Security and any pensions from your retirement income goal, then take the remaining income and multiply by 20-33 depending on how long you expect to live. 20 for shorter lives and 33 for longer ones.

    Assuming my wife and I average $50k in earnings each, we would receive Social Security at $1,775/month or $21,300 each. That gives us $42,600 + the income from the $728,000.

    How much income from the nest egg? At a 3.33% withdrawal rate, that’s $24,266/year.

    This totals out to $66,866/year which would be about 1.33 times median household income. Plenty to live on when you’re debt free.

    To estimate your Social Security benefits, go to:

    How to do it, go to:

  59. Anonymous

    Anon: I didn’t mean to imply it was the only way to go. Counting our employer matches, our annual retirement savings are about 2/3 in 401K accounts and 1/3 in the Roths. And like I said, we do plan to have taxable income in retirement – hopefully quite a bit!

    The Roth also helps us diversify against a future unknown: tax brackets (which I believe are only going to go up – but I can’t say this with 100% certainty). An additional advantage is that we will have to take minimum distributions from the 401K accounts, but we never have to touch the Roth unless we want to; another is that when we get closer to retirement we will reallocate across the accounts to hold more equities in the Roths and more cash/bonds in the 401Ks to minimize the chance we’ll be required to sell stocks at a market low in order to fulfill the minimum distribution requirement.

    So, unless one is absolutely certain they won’t have taxable income in retirement (and I wouldn’t want to live that lifestyle, personally, but others might be just fine with it) I think it’s good to have BOTH types of accounts.

  60. Anonymous

    I retired recently at age 62, with a net worth of about 750k. About 580k of that is stock and bond investments and cash, the rest real estate, including one rental house. I have zero debt — no mortgages, no car payments, nothing. I make about $1200 per month working part time and the rental nets about $600. I budgeted for spending $20k/yr from the investment portfolio, and so far this year I’ve spent just over $2.5k, much of it on one-time expenses. At this pace I’ll only need to pull $10k from the portfolio for the year. My lifestyle is fairly modest, but the key is NO DEBT!!!

  61. Anonymous


    Even with a lot more income, I’m still going to come out ahead. Assuming you’re in the 25% bracket, for your Roth contributions, you’re paying 25% of your contributions in taxes now to pay nothing later.

    Me? I’ll pay nothing now; at withdrawl, I’ll pay nothing on the first $20,900; 10% on the next $16,700; and 15% on the next $51,200. My total taxes on $88,800 of income are $9350, or approximately 10.5%. Even if you’re in the 15% bracket now, I’m still ahead by 4.5%, which is a non-trivial amount.

    If you don’t plan to have any taxable income at all in retirement (think Trad IRA/401k) I’d think long and hard before believing Roth is the only way to go. That’s especially true if you’re in the 25% bracket today.

  62. Anonymous

    $1-1.5million would be ideal, but I could survive on much less.

    /agree with anonymous to an extent about Roth.

    I don’t invest in Roth right now, but that’s because a chunk of my income is in the 25% tax bracket. I will always fill out the 15% tax bracket with income. If I have any left after paying living expenses and debt, I will invest that into a Roth IRA in the future. I’m sure over the course of my life, there will be times that my income is very low due to job loss, economy, extensive tax deductions, etc. In those years I will take the opportunity to convert some tax-deferred income into tax-paid at a very low tax rate. if the economy and the market are low at the same times, then I get to convert at a smaller value and save even more taxes.

    There is no right answer for everyone. It all depends on how much money you have to work with or if you have other investment or business opportunities. In my case there are many farmers in my family. If I get an opportunity to buy farmland and work with family to farm it, then that is a good investment vehicle for me but may not work for others. You have to pay a little extra to keep the extra liquidity and take advantage of opportunities like this. If you sock away every dime to your retirement account you can find yourself with impressive net worth but no available cash if you need it.

  63. Anonymous

    I’m with Tom – we’re aiming for the $3-5M range, which would allow us to replace our current income (in estimated future dollars). We figure health care and travel will replace what we’re currently saving and paying on our mortgage, and we always exclude social security from our calculations as we’re young enough (and ‘wealthy enough’) to pretty much be guaranteed reduced benefits and/or means-testing.

    Anon: I AM a Roth die-hard, because I would like a lot more than $20K annually for two people!

  64. Anonymous

    If I owned my house and my student loans were paid off and I was no longer saving anything for any reason, my wife and I could maintain our lifestyle on about $20,000 annually after taxes. Today’s standard deduction + 2 exemptions ($11,400+$3650*2) leaves us with a tax basis of $1300. Then take away $1100 per person who is over 65. So we’d have no tax bill.

    This would put us at the 1/2 million mark based on your calculations.

    BTW, this is a fun example for the Roth die-hards. Let’s assume that my $.5 million was invested through a 401k or traditional IRA. My contributions were made with tax free income, and because of my exemptions, my withdrawls are tax-free too. Those who contributed to their Roth paid taxes on the contributions for the sake of not paying taxes on something they wouldn’t have had to pay anyway!

  65. Anonymous

    A whole bunch as I have about $300k in debt (mortgage and student loans). If I were to retire I’d probably either A) move back to Boston, in which case I’d need a fair chunk of money for a condo or B) move out of the suburbs to someplace more rural where I could have a bit of land to hide in. Today I’d choose A, so I’d probably need about 1.5M after I paid off my debt, living in the city isn’t cheap. More would be great as I’d like to travel.

  66. Anonymous

    Call me a dreamer; but I think I would be able to retire “comfortably” with $400K in the market (notice I didn’t say bank) and $100K rainy day fund.
    Why so little? I recieve a pittence (<$1K a month) retainer from uncle sugar for 20+ years of military servitude. I think $400K invested in decent dividend paying stocks will replace my wife's current income. Last but not least, there will be a small bit of SSA avaiable for us when we retire (hopefully).
    The most important aspect; no mortgage and we have little consumer debt. That is my gameplan, unless I hit the lottery (yeah!!).

  67. Anonymous

    I will answer with the assumption that I had paid off my mortgage, Student Loans, and no longer was paying for childcare (which is, incidentally, more than my mortgage. ugh) And with the assumption that my monthly medical costs are reasonable (under $500 for my husband and I).

    To live very comfortably, we would want 1.5M

    We could do it with less, but it wouldn’t be nearly as much fun. Boy do we have a lot of work to do.

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