How Much Do You Really Need to Retire? Breaking Down the Numbers and Strategies

It’s one of the most common financial questions I hear: “How much do I really need to retire?” The answer is different for everyone—but one thing’s clear: most people are underestimating what it takes.

Alan Clopine and I will walk you through the numbers, the strategies, and the traps to avoid so you can retire with confidence. Here’s what you need to know.

1. Retirement Savings: The Real Targets

People love to throw around round numbers—$500,000, $1 million—but retirement planning is more complex than that.

• Longevity matters. If you’re 65 today, you’re likely to live well into your 80s or even 90s. That’s a long time to fund.
• Healthcare is a big expense. The average 65-year-old couple spends around $315,000 on medical costs over their lifetime.
• Inflation silently eats your purchasing power. At 3% annually, your dollar loses half its value in about 24 years.
• Taxes aren’t going anywhere. Pre-tax accounts like 401(k)s will be taxed as income later, while Roth IRAs grow tax-free. Knowing where your dollars live matters.

To plan right, you need to look at your spending habits, location, expected health costs, and tax positioning—not just the balance in your account.

2. Generating Income in Retirement

Once you’ve saved, the next question is: How do I make it last?

We explored the pros and cons of two common strategies:

Annuities

• Offer guaranteed income for life by shifting risk to an insurance company.
• A 67-year-old investing $1 million could get $6,300/month, based on Schwab’s estimator.
• Downsides? High fees, lack of flexibility, and surrender penalties.

Investment Portfolios

• More potential for growth and flexibility.
• But they come with market volatility and require smart withdrawal strategies.

We modeled different withdrawal timelines using a 6% return:

• $19,000/month for 5 years
• $8,500/month for 15 years
• $6,400/month for 25 years
• $5,600/month for 35 years

It’s all about balancing income, flexibility, and longevity.

3. Social Security Timing: The Game Changer

Social Security makes up 50% or more of income for over half of retirees—so getting the timing right is key.

• Claiming at 62 reduces your benefit by up to 30% permanently.
• Waiting until age 70 can increase your benefit by up to 75% compared to early filing.
• Married couples should coordinate benefits to maximize their lifetime payout.

For most people, it pays to delay if you can afford to—especially if you’re in good health.

4. Want to Become a Millionaire?

It’s more doable than you might think—if you start early.

• At 30, save $700/month.
• At 40, save $1,400/month.
• At 50, save over $3,000/month.

Start small, automate it, and take full advantage of employer matches. Once you hit age 50, don’t forget catch-up contributions—they can turbocharge your savings.

5. Stretching Retirement Dollars Further

Not all retirement savings strategies are about investing—cost control is just as powerful.

• Downsize your home.
• Move to a tax-friendly state. Leaving California for West Virginia could save $30,000/year in living costs.
• Trim discretionary spending. Dining out less and traveling smarter can add years of runway to your retirement funds.

We also recommend reviewing your debt picture and aiming for a lean balance sheet heading into retirement.

6. Use the Free Financial Blueprint

Don’t guess—know where you stand.

Our Financial Blueprint Tool at YourMoneyYourWealth.com lets you plug in your numbers and see where you land. It gives you a clear outlook:

• All Good
• Average
• Needs Help

The best part? It’s free, and you can do it from the comfort of your home.

Bottom line: Retirement is more than a number. It’s about strategy—income, taxes, inflation, lifestyle, and timing. With the right tools and planning, you can retire comfortably and stay there.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.