The idea of having a “magic number” for retirement savings — $1 million, $1.5 million or even $2 million — has been popularized by surveys and headlines. However, these figures often fail to reflect individual circumstances and personal goals. Instead of chasing an arbitrary number, retirees and pre-retirees should focus on determining their “enough is enough” number — the amount of money required to sustain the lifestyle they desire.
This approach offers a sense of stability and certainty, which is key to creating a retirement plan that truly works for you. With the right preparation, careful planning and attention to detail, you can feel confident in your ability to meet your needs and live comfortably in retirement.
Shifting the focus from big numbers to personal needs
Surveys by Northwestern Mutual and Charles Schwab suggest that Americans need between $1.4 million and $1.8 million to retire comfortably. Northwestern Mutual’s April 2023 survey revealed that Americans believe they’ll need $1.46 million — a 15% increase from the previous year and a 53% rise from the $951,000 target reported in 2020. Similarly, Charles Schwab’s August 2023 survey pegged the target at $1.8 million, a steady increase from $1.7 million the year before.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While these figures may provide a general benchmark, they don’t account for the wide range of personal financial situations. Instead of focusing on a one-size-fits-all number, consider these structured questions:
- What are your essential monthly expenses in retirement?
- How much income will you receive from reliable sources like Social Security or pensions?
- What discretionary spending do you envision (e.g., travel, hobbies)?
- What legacy or charitable goals do you want to achieve?
By breaking the process into manageable steps, you can avoid feeling overwhelmed and work toward a plan that reflects your specific needs and values.
Why a universal 'magic number' falls short
The ranges suggested by surveys don’t always reflect the reality for most people. For some, a higher figure may be necessary due to their lifestyle or location, while for others, it may be entirely too high. Retirement planning is more than chasing a headline-grabbing number — it’s about creating a plan that fits your unique circumstances and aligns with your financial and personal goals.
For example, individuals with guaranteed income sources like Social Security and pensions may need less in savings to supplement their income, especially if they live modestly. Others, who rely heavily on their savings to maintain a higher-cost lifestyle, might need to aim for the upper end of these suggested ranges.
The psychological aspect: Knowing when you have enough
Surveys like those from Northwestern Mutual and Charles Schwab can sometimes create unnecessary stress, leading people to question whether they’ll ever be financially prepared for retirement. This anxiety often stems from not having a clear plan or an understanding of personal needs.
Establishing your “enough is enough” number helps reduce uncertainty. Knowing exactly where you stand financially allows you to focus on what truly matters — enjoying retirement without the lingering stress of “what if.” This clarity is especially comforting for individuals who value security and reliable outcomes.
Building your 'enough is enough' number
To identify your personal number, follow these methodical steps:
- Assess your spending. Review your current expenses and categorize them into fixed costs (e.g., housing, insurance) and discretionary costs (e.g., dining out, travel).
- Account for income. Calculate how much you’ll receive from guaranteed sources like Social Security, pensions or annuities. These predictable income streams are the cornerstone of your plan.
- Calculate the gap. Subtract your guaranteed income from your estimated expenses. The remaining amount represents what you’ll need from your savings or investments.
- Plan for longevity and inflation. Use conservative inflation estimates and assume a 25- to 30-year retirement. This ensures your plan is realistic and protects against unforeseen changes.
- Work with a professional. A retirement planning specialist can help refine these calculations and offer tools to test your plan against potential risks, such as market downturns or unexpected medical expenses.
The bottom line
Surveys about retirement savings can give broad estimates, but they don’t tell the whole story. Retirement readiness is about aligning your financial resources with your desired lifestyle. Some individuals may prioritize a simple life focused on family and community, while others may aim for travel and new experiences.
Knowing your enough-is-enough number ensures your financial resources are aligned with these priorities, giving you the confidence to make informed decisions and adapt as needed. Determining your number is a deeply personal process, but it doesn’t have to
be overwhelming. By following a clear, structured approach, you can create a retirement plan that balances stability and flexibility, offering both financial security and the freedom to enjoy life on your terms.
Dan Dunkin contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Related Content
- Sleep Better in 2025: Slay These Four Retirement Fears
- How to Think About Money and Aging Now
- How Much Money Is Enough to Be Happy? Can You Have Too Much?
- How to Plan for Retirement’s Go-Go, Slow-Go and No-Go Years
- Five Tax Strategies to Help Your Money Last in Retirement
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm Retired and Want to Give My 3 Grandkids $5,000 Each for Christmas, But Their Parents Don't Want Them to Spend It All.
You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read This
Roth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the Case
A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
The Stoic Retirement: Ancient Wisdom for Today’s Biggest Life TransitionA "Stoic retirement" doesn't mean depriving yourself. It's a character-based approach to life and aging that can bring calm and clarity.
-
11 Outrageous Ways To Spend Money in RetirementWhether you have excess cash to spend or want to pretend, here’s a look at 11 ridiculous ways retirees can splurge.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
