So how do you plan for a successful retirement without over- or under-shooting? Here’s a breakdown of how to find your number, manage the tradeoffs, and build a plan that lets you live comfortably—now and later.

1. Save Enough, But Not Too Much

The goal of saving for retirement is to ensure future security, but once you’ve reached a point of stability, saving more than you need can actually cost you valuable time and experiences.

Under-saving may lead to financial hardship in your 70s, 80s, or 90s. Over-saving may keep you working longer than necessary, with extra funds that don’t meaningfully improve your retirement lifestyle.

The sweet spot is somewhere in between—enough to fund the retirement you want, not so much that you delay living your life today.

2. Use This Simple Formula to Find Your Retirement Target

Let’s say you want to spend $6,000 a month in retirement and expect $2,000 per month from Social Security. That leaves a $4,000 monthly gap, or $48,000 annually, that needs to come from your savings.

Adjusting for 10 years of inflation (at 3%), that becomes about $64,500 per year.

Using the 4% withdrawal rule, you’d need a retirement portfolio of: $64,500 ÷ 0.04 = $1.612 million

That’s your target to generate sustainable income over a 30-year retirement.

3. Growth Assumptions and the Savings Gap

Now let’s say you already have $750,000 saved and you’re expecting a 6% annual growth rate. Over 10 years, your portfolio might grow to $1.3 million—a solid amount, but still $270,000 short of your goal.

Depending on your time frame and assumptions, this gap may be manageable. For example:

• Starting with $500,000? You might need to save $4,500/month.
• Starting with $1.2 million? You might not need to save anything more.

4. Don’t Forget Taxes

The type of accounts you withdraw from in retirement matters—a lot.

Let’s look at Tina, who needs $84,000/year after taxes. If her money is in a traditional IRA, she might need to withdraw $117,000/year to net that amount—thanks to income taxes.

That’s a 7.3% withdrawal rate, which would deplete her portfolio by age 82.

But if the funds were in a Roth IRA, those withdrawals would be tax-free. Tina’s portfolio could last until age 90, just by avoiding taxes. This is why tax efficiency is a critical part of retirement planning.

5. Plan for Uneven Spending in Retirement

Retirement isn’t a straight line. Most people spend more early on—traveling, renovating homes, or helping with grandchildren—then slow down later.

Tina, for instance, spends $10,000/month in her first five years of retirement, including $3,000 on travel. After that, her spending drops to $7,000/month. This change alone improves her financial outlook dramatically.

Being realistic about your spending phases can make your retirement plan more accurate and sustainable.

6. The Retirement Spending Smile

This concept, supported by retirement research, shows that retirees often decrease spending over time. Instead of increasing expenses with inflation every year, you might reduce spending naturally during the “slow-go” and “no-go” years.

Adjusting Tina’s spending growth from 3% to just 2% annually improved her success probability from 63% to 84%.

Lesson? You don’t always need to plan for increasing costs. Sometimes, less is more.

7. Life Expectancy Matters More Than You Think

Life expectancy assumptions dramatically affect how much you need to save.

If Tina plans for a 100-year life, her success rate drops. If she only expects to live to 80, her odds jump to 99%. That’s a wide range, and while no one can predict the future, it’s important to plan for longevity—especially with improved healthcare and longer average lifespans.

8. Work Longer—or Adjust Spending

If Tina continues working until age 68 or 69 and continues saving, her chances of success rise significantly. But interestingly, adjusting her spending in the early years of retirement can offer a similar boost—without the extra years of work.

This is where a detailed, personalized retirement plan makes all the difference. The right choices—like reducing early travel or adjusting inflation assumptions—can help you retire sooner without giving up your lifestyle.

The Bottom Line

Retirement planning isn’t just about hitting a number. It’s about building a plan that supports both your future security and your present happiness.

Start with a realistic estimate of how much you’ll need. Factor in inflation, taxes, and life expectancy. And most importantly—design your retirement around your life, not just your finances.

A smart retirement plan allows you to enjoy your time, stay healthy, and leave worry behind—exactly what this next chapter of life should be about.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.

Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.

The post How to Plan for Retirement Without Sacrificing the Life You Want Today appeared first on ROI TV.

As of 2024, about 90% of Americans over age 65 receive Social Security benefits. For 40% of those recipients, Social Security makes up at least half of their income. And for 15%, it’s their only source of income. That’s a risky position to be in. If you want to retire comfortably and independently, it’s essential to understand how much of your income Social Security will replace—and what you’ll need to cover the rest.

How Much of Your Income Will Social Security Replace?

Social Security is designed with a progressive formula. That means lower-income earners receive a higher percentage of their working income than high-income earners.

Here’s a breakdown:

• Lower-income earners (< $30,000): Social Security might replace 60-70% of your income.
• Average earners ($30,000–$75,000): You’ll likely receive 40-50% of your income.
• Higher-income earners (> $75,000): You can expect about 25-30% in income replacement.

Let’s say you’re earning $55,000 per year. Using the 80% rule, you’ll need about $44,000 annually in retirement to maintain your lifestyle. Social Security might cover around $22,000 of that, but where will the remaining $22,000 come from?

That’s where your personal investments come in.

How Much Should You Save?

If you’ve heard of the 4% rule, it’s a helpful guideline for calculating how much you’ll need to generate retirement income. To cover a $22,000 income gap, you’ll need a nest egg of about $550,000 ($22,000 ÷ 0.04).

Here are a few more quick examples:

• $30,000 income → Needs ~$150,000 in investments
• $75,000 income → Needs ~$825,000
• $100,000 income → Needs ~$1.375 million

Sound intimidating? Don’t worry—it’s about consistent progress, not perfection. For the average income example, you’d need to save just under $200 per month over 40 years to hit that $550,000 target.

Maximize What You Can Control

To increase your retirement savings and bridge the Social Security gap:

• Start saving and investing early.
• Increase your contributions each time you get a raise.
• Avoid lifestyle creep—living below your means is powerful.
• Use tools like ssa.gov or the Social Security Quick Calculator to estimate your benefits.
• Understand the taxable income cap: Only the first $160,200 of your income is taxed for Social Security purposes.

And remember—Social Security benefits can change. They’re based on your 35 highest earning years, and your benefits cap out at a certain income level.

My Personal Approach

Personally, I plan to fund 100% of my retirement through investments. If I receive Social Security, that’s just a bonus. It’s not about fear—it’s about freedom. I want to retire on my own terms, and I believe you can too.

So, where do you stand? Are you counting on Social Security or building your own plan? Let me know in the comments, and don’t forget to subscribe for more helpful tips on planning your financial future.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post Why You Shouldn’t Rely on Social Security Alone for Retirement appeared first on ROI TV.