How Much Money Is Enough To Retire On?

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How much money is enough to retire on? Depends on your lifestyle expectations, life expectancy, health, and more. Figure it out!

The question many of us ask ourselves is whether we will have enough money to retire on. Well, it depends on a lot of factors. Many retire on their Social Security alone. Others have a $1 million nest egg. Still others get a real pension from some old-fashioned place.  And then there are more questions, like what are you used to?  Do you have big plans?  Medical concerns?  Long-lived relatives?  Let’s look at these factors and maybe that will help put things in perspective.

First, what do you have coming?

If you’re like me, you didn’t get jobs with pension plans attached.  If anything, you started with an IRA and when 401(k) or 403(b) plans were offered, you might have signed up.  Hope you had a good match and didn’t borrow against it.  That would have given you a shot at having  a nest egg.

Were you a lucky individual investor?  One who put your extra money to work and now have a nice portfolio?  Kudos to you!  My aunt could beat Fidelity back in the day, and she’s very well off as a result.

Did you inherit money and not blow it?  Way to go!  A friend of mine was able to use hers to pay off her house and now she takes a couple of vacations a year.  Cruises to Alaska type vacations, mind you.

If you haven’t yet inherited, just forget about it.  If you do, it will be a nice surprise.  If you don’t, that’s just how it is so move on. Let’s just say Dad needed it for his own retirement.  (Speaking from experience.)

What else do you have?

Do you own your own home?  For the space you have it’s probably cheaper than renting, especially if it’s paid off.  And then, you could downsize and use the difference for a cruise to Alaska or nifty new furniture.

What about a second home?  Are you using it that much?  If need be, you could sell off one home and live in the other full-time.

Got a savings account?  Great!  Don’t hit that till the market goes down and makes your retirement accounts swoon.  Always good to have a cash reserve.

Have you got a side hustle or business you plan to keep in retirement?  Income from that will help you along.  Just watch for seasonal variations or whatever that disturbs the income stream.

Find out what Social Security plans to give you.  If you want, check out what they’ll give you at different ages and run scenarios.

Now you have an idea of what you possess that is either money or could become money when you need it.

What are you used to?

Consider your lifestyle for a moment.  Are you comfortable at $40,000 a year or do you need $140,000?  All of that doesn’t need to come from savings; if you have Social Security and/or a pension, those will give you income.

I know people who live reasonably comfortably on less than $800 a month.  They live in subsidized housing and most don’t have cars; those are just unaffordable.  They take the bus or walk.  A lot of people are living that way, though I’d like to see members of Congress and high state officials do it for a month and see how well that works for them.

If you’re accustomed to more than the minimum, as many of us are, you will need to supplement with savings and such.  That’s one big expense for your nest egg to cover.

Many of us will make adjustments to a new retirement lifestyle.  A married couple with two cars might go down to one for a savings of thousands a year, when you figure in insurance, maintenance, gas and so on.

Any big plans for retirement?

Are you planning to move when you retire?  Some will leave the country to try saving money in  a different economy.  If that’s too exotic for you there are plenty of options here in the States to look at, some still quite reasonable.  A friend and her husband are looking to sell their home here and go to Mexico winters, maybe coming back for summers in a small home in the woods.

For more about finding places to move to check here.

How about travel?  Again, this can cost a lot.  But if you work at it, you can find senior discounts and house-sitting gigs around the world to give your travel itch a scratch without breaking the bank.

A couple I know are getting a fifth wheel so they can snowbird on the coast of Texas next winter.  They won’t be in their wheeled home year round, but some people choose to see the continent and travel year-round for a while.  They often sell their primary home to fund the home on wheels.

Medical and long-term care.

Plan on staying healthy as long as possible to save money.  Many of us have health concerns for which the doctor will recommend lifestyle changes.  It’s time, or maybe past time, to do this, so do it.  If you can still walk when you’re 85, it may be because you took it up again when you ditched a desk at 65.

For more on walking, check here.

How long do your relatives live?  If in the past 3 generations you had several nonagenarians, look out for a longer life for yourself and siblings.  That means you’ll need more money, of course.  If not. maybe you don’t have to plan for 30 years of life.

If you are nervous about it and can afford long-term care insurance, consider it.  Such coverage is not the most affordable thing; the rest of us will either have to avoid nursing homes past the 100 days Medicare will pay, or go on Medicaid.  And the only way that’s really the End of the World is if you are hell-bent on leaving money to your kids.


Which brings us to why so many people save so much extra anyway:  leaving it to others.  If not. more of us would spend a bit extra when we’re young enough to enjoy an extra trip or luxury.

But look at it this way.  Many of us are not inheriting because our parents had medical and long-term care costs.  They paid their own way as long as they could.  We should do the same as we are able.  So should the kids.

Parents among us raised some expensive kids, helping them through school, maybe helping with other expenses too.  Now when the parents need to pull back and fund their own way in retirement, the kids can be grateful for what they already have.  Unless, of course, you are very well off financially.

The rest of us may need to tap public programs more and more when we get very old.  This, thanks to economic conditions such as inflation and downturns, and maybe living longer than expected.  As noted above, it’s not living high on the hog but it’s living.

It might be a good idea to consider voting your own practical interests in this regard as we go forward.  And as for being dependent on government, who isn’t in some way?  This is what you’ve paid taxes for your entire life.

Too many of us will never reach $1 million in retirement assets.  Nor should we need to.

So, how much money is enough to retire on?



How much money is enough to retire on? Depends on your lifestyle expectations, life expectancy, health, and more. Figure it out!How much money is enough to retire on? Depends on your lifestyle expectations, life expectancy, health, and more. Figure it out!How much money is enough to retire on? Depends on your lifestyle expectations, life expectancy, health, and more. Figure it out!






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