There is no magic number – and it sure isn’t $1,000,000

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AUTHOR: R Quinn on 9/11/2025

You do not need $1,000,000 to retire or $1.5 million or any number some expert throws out on YouTube or social media. Those numbers are generated by people selling advice, investments or videos.

Having a simple dollar target makes planning appear easy, but IMO more likely to scare people into inaction because they see an impossible quest. Besides, we know very few people come near that amount and given they still retire, demonstrates the value of such assumptions. 

The median household retirement savings for Americans aged 65-74 is around $200,000. The average, or mean, household retirement savings for this same age group is considerably higher, around $609,230.

According to data from DQYDJ (2024), the median individual income for a 60-year-old in the U.S. is $60,000. Meanwhile, the average (mean) individual income at age 60 was reported as $81,424

What you need is an amount in retirement investments that when combined with Social Security and other steady income sources will generate the income you determine is needed to live as you choose. HD readers mostly know this, but I suspect the wider population does not. 

Aside from a person’s lifestyle, the number you need to accumulate as retirement investments depends on:

Your annual total income objective in retirement

Your age at retirement 

If you have a pension or annuity?

Your household Social Security benefits **

What withdrawal percentage are you comfortable using?

Do you have income for a survivor to consider

A strategy to cope with inflation

** As of January 2025, the average monthly Social Security retirement benefit for an individual retired worker at FRA (typically 66 to 67, depending on birth year) is approximately $1,976. For a household, this amount can vary. If both spouses are eligible for Social Security, the household benefit could be roughly double this amount, assuming similar earnings histories. Or, the total benefit could be about 1.5 times the individual earners benefit. 

So, even though I don’t know how to use a spreadsheet, it appears the equation may be something like this.  

Feel free to jump in. 

Pre-retirement income X % = desired retirement income – pension or annuity $ – household SS benefit /.04

Thus $60,000 X 80%= $48,000 – $0 (no pension) – $23,712 SS benefit = $24,288/.04=$607,200 needed for retirement assuming a 4% withdrawal rate.

Needless to say, mess with any of these assumptions (a pension changes a lot) and you get a different answer – and that’s the point after all. You can always get a different answer.