How much money do you need to retire with security?

Fact is, nobody can tell you that number, it’s up to you.

A recent Charles Schwab study found that the average American felt they need about $1.7 million to retire comfortably. Where do they get that? Probably from reading what out-of-touch experts write.

If you have $1,700,000 in investments for retirement, they will generate about $68,000 in income using the 4% withdrawal rule (and if you are smart, most of it could be tax free).

Now add the average Social Security benefit for a couple;$25,200 (at least 15% tax free) and the household income is $93,200. That is 50% more than the median household income in the US.

So, how much do need to retire with financial security? Here is more realistic information.


  1. You also should always be cognizant of what you pay for borrowing. I know of not one mortgage brokerage that has ever suggested to a new borrower the option of a 15 year mortgage even if the borrower can afford it. No, they want the interest payments for 30 years. When getting approved for a mortgage, mortgage brokers should give options. You can afford a house of #$$ for 30 year payments or #$ if you go with a 15 year mortgage. At a young age certainly a 15 year is better. For most 1st time buyers it is a starter home! What a way to save. Nobody ever talks about interest rates. Only monthly premium etc.

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  2. I’ll never see a million in my life. Fortunately, I was able to retire early comfortably on much less.

    How much you need depends on how much you spend, where you live, your lifestyle and how many in your family [including pets- pets can be as expensive as children.]


  3. You stated:”If you have $1,700,000 in investments for retirement, they will generate about $68,000 in income using the 4% withdrawal rule ” A more important question might be: How much will that money generate in dividends or interest? Fairly safe dividend-paying stocks or funds can generate about that 4% without much effort or risk, and you can still keep most of your investments.


    1. The 4% rule allows for an increase in the amount withdrawn each year to reflect inflation and includes dividends on any stock or mutual funds in the portfolio. It’s just a guide. I’d say that there is more risk in trying to pick the right dividend paying stocks than in using the 4% strategy on index mutual funds which helps not running out of money. Each to his own method.


  4. Since I retired early, I am often asked that same question. I counter with how much are your expenses now? Most people do not know how much they spend on housing, transportation, utilities, insurance and food. For transportation, they only think in terms of a car loan, which often is not paid off. They never count the insurance or repairs, new tires or oil changes.

    All they know is their gross pay. They have no idea how much of their money is being spent on non-essentials things like vacations or going out to dinner. I call these the basic essentials and necessities their current standard of living and the vacations and dinning are their quality of life.

    Most people who are not going deeper into debt, do not realize that they have been living on their net pay. They have no idea how much their net pay is either. If they have lots of deductions and contributing to pensions or 401Ks there could be a big difference between the two numbers. Most of those contributions and taxes get reduced or go away in retirement. Once you get that number out of them, then you can point out possible income streams and how much they will get and how much they need to save to maintain the status quo.

    So my answer is if you are still going into debt now, you can’t retire. If you can cover you bills and put some money away to cover those unexpected expenses, you are good to retire and maintain your basic standard of living. If you have money left over for vacations, trips to museums and dining out in your budget by withdrawing a percentage from your investments less than the rate of inflation, then you’ll maintain the same quality of life. But the pile of money that you need invested all starts with what you are spending now. So the first question is how much are you spending now?

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