{"id":274326,"date":"2025-11-10T00:36:16","date_gmt":"2025-11-10T00:36:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/274326\/"},"modified":"2025-11-10T00:36:16","modified_gmt":"2025-11-10T00:36:16","slug":"the-realistic-minimum-retirement-savings-needed","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/274326\/","title":{"rendered":"The Realistic Minimum Retirement Savings Needed"},"content":{"rendered":"

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\n Jacob Wackerhausen \/ iStock.com <\/p>\n

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You may have heard you need at least $1 million in the bank to retire. The truth is, a comfortable retirement<\/a> will look different for everyone. Some people might need much more than that, and some might only need $700,000 to retire comfortably.\u00a0<\/p>\n

So what\u2019s a more realistic minimum number<\/a> you should aim for?\u00a0<\/p>\n

Why the $1 Million Rule Doesn\u2019t Work for Everyone<\/p>\n

Retirement costs can look very different depending on where you live, how healthy you are, whether you have a mortgage, and what kind of lifestyle you want. For example, if you plan to retire abroad<\/a> in Thailand, your retirement budget <\/a>will look completely different than if you were to retire in New York City.\u00a0<\/p>\n<\/p>\n

\u201cPeople fixate on round numbers, but the right amount is personal,\u201d said Ben Storey, retirement strategy director at Bank of America\u2019s Merrill. \u201cIt depends on your income needs, location, and how long your retirement might last.\u201d\u00a0<\/p>\n

\u201cTempting as it is to put a single number on retirement, the answer to how much you\u2019ll need to save really depends on the life you expect to lead,\u201d he added. If you need help figuring out what your number is, here are a few classic benchmarks financial planners use to estimate how much someone needs:<\/p>\n

The 4% rule<\/a>: This rule says you can you can safely withdraw 4% of your retirement savings in the first year, then adjust for inflation annually, ideally lasting for 30 years.
\nRule of 25: This rule is essentially the same as the 4% rule, but it works backward. Multiply your expected annual expenses by 25. That\u2019s the rough amount you\u2019d want saved
\nSalary multiples: Some advisors suggest having 8 to 10 times your final salary saved by retirement. So if you make $120,000 a year, you should have at least $960,000 to $1.2 million saved up.\u00a0<\/p>\n

These aren\u2019t hard-and-fast rules, but they can help you gauge how much you\u2019ll need to fund your ideal retirement lifestyle. For example, using the 4% rule, you\u2019d need around $600,000 to retire comfortably in Thailand, assuming you can live on $2,000 a month (4% of $600,000 is $24,000 a year). But if you plan to retire in a high-cost city like New York, where $6,000 a month is more realistic, you\u2019d need closer to $1.8 million saved to maintain the same 4% withdrawal rate.<\/p>\n

Discover Next: I\u2019m a Retired Boomer: 3 Things I Wish I Had Done Differently To Better Prepare For Retirement Longevity<\/a><\/p>\n

Why It\u2019s Safer To Save More Than the Minimum<\/p>\n

Trying to retire on too little can backfire fast. A few reasons why:<\/p>\n

You might live longer than expected: According to the CDC, the average lifespan in the U.S. is 78.4 years. So if you retire at 65, you\u2019ll have to make your savings stretch for another 13 years or even more.
\nInflation: Inflation negatively affects the purchasing power<\/a> of your savings, which means your savings might be worth less with each passing year.
\nHealth care isn\u2019t cheap: According to the Employee Benefit Research Institute, retired couples may need as much as $428,000 in savings to be able to mostly cover their medical expenses<\/a>, depending on their Medicare coverage level. This amount is likely to increase over time.
\nMarket downturns can hurt early retirees: If the first few years of retirement coincide with a recession, your portfolio can take a hit.<\/p>\n","protected":false},"excerpt":{"rendered":"Jacob Wackerhausen \/ iStock.com Commitment to Our Readers GOBankingRates’ editorial team is committed to bringing you unbiased reviews…\n","protected":false},"author":2,"featured_media":274327,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,9549,184,185,13558,1793],"class_list":{"0":"post-274326","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-gobankingrates","13":"tag-personal-finance","14":"tag-personalfinance","15":"tag-planning","16":"tag-retirement"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/274326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=274326"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/274326\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/274327"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=274326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=274326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=274326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}