Most people have a vague idea of when they'd like to retire — "around 65, maybe earlier" — but very few have actually done the math. The result is a nagging uncertainty that follows them for decades. Let's fix that.
Your retirement number comes down to a simple equation: how much you'll spend each year in retirement, multiplied by how many years you'll need it to last. That gives you a target. Then you compare it to what you've saved, what you're adding, and what growth you can reasonably expect.
For most people, annual retirement spending is roughly 70–80% of their pre-retirement income. If you earn $150,000 a year, plan for about $105,000–$120,000 per year in retirement.
If you retire at 62 and live to 90, that's 28 years of withdrawals. At 65, it's 25 years. Most planners use 30 years as a safe assumption — it covers longevity risk without being overly conservative.
At $110,000 per year for 30 years, your base target is $3.3 million. But Social Security, pensions, and investment growth reduce how much you actually need to save.
The goal isn't to have a perfect number — it's to have a number at all. Most people are flying blind.
They forget about healthcare. Before Medicare kicks in at 65, a couple can easily spend $20,000–$30,000 per year on health insurance premiums alone. If you're planning to retire at 60, that's a five-year gap that needs funding.
They underestimate inflation. At 3% annual inflation, $110,000 today has the purchasing power of about $75,000 in 15 years. Your plan needs to account for rising costs, not just today's dollars.
They don't factor in Social Security timing. Claiming at 62 vs. 70 can mean a difference of 76% in your monthly benefit. For many people, delaying Social Security is the single highest-return "investment" they can make.
Pull up your most recent 401(k) or IRA statement. Write down the current balance. Then write down how much you're contributing each month. That's your starting point. From there, a good advisor can run projections that show you exactly where you'll land — and what adjustments would make the biggest difference.
Book a free 30-minute call and we'll show you exactly where you stand — no obligation, no sales pitch.
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