![\"Ramit](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/10\/Ramit-Sethi-headshot.jpg\")
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\n \u00a9Ramit Sethi <\/p>\n
Commitment to Our Readers<\/p>\n
GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by Many Americans are worried they won\u2019t have enough money to retire<\/a>. As living costs rise, nearly one-third (30%) of Americans are not confident they will be able to cover day-to-day expenses for the remainder of their lives, and 63% of Americans believe the dream of retiring between the typical ages of 65 and 70 is unattainable, a recent TIAA survey<\/a> found.<\/p>\n However, money expert Ramit Sethi believes these fears are overblown. \u201cWhat if everybody panicking about retirement is actually wrong? The truth is, you might retire with more than you think,\u201d he said in a recent YouTube video<\/a>.<\/p>\n<\/p>\n He believes that if you actually do the math, you might be pleasantly surprised by your financial circumstances. Here\u2019s the retirement math Sethi wants everyone to know about<\/a>.<\/p>\n Ask Yourself These 3 Questions To Plan Your Retirement<\/p>\n To figure out how much money you will actually need to retire, Sethi said to ask yourself three questions:<\/p>\n When do you want to retire? If you don\u2019t have the answers to the first two questions, Sethi said to assume a retirement age of 65 and that you\u2019ll live 30 years in retirement. <\/p>\n Why Retirement Spending Is Often Lower Than You Think<\/p>\n When it comes to answering the last question, Sethi noted that you will likely spend significantly less in retirement<\/a> per year than you do during your working years.<\/p>\n \u201cRetirement spending usually looks quite different,\u201d Sethi said. \u201cFor many retirees, life often becomes simpler and less expensive.\u201d<\/p>\n That\u2019s because there are a number of expenses you no longer have to worry about, like commuting costs, work clothes and, ideally, mortgage payments.<\/p>\n How Social Security Can Offset Your Retirement Costs<\/p>\n Although Social Security likely won\u2019t be able to cover all of your retirement costs, it can significantly offset the total amount you need in savings.<\/p>\n \u201cIf you made around the median salary of $62,000 \u2026 your Social Security check would be around $28,000 a year,\u201d he said.<\/p>\n<\/p>\n That amounts to roughly $2,300 a month, and the amount you receive increases each year with inflation.<\/p>\n Use the 4% Rule To Estimate Your Retirement Savings Goal<\/p>\n If you want a rough estimate of what your total retirement savings goal should be, Sethi recommended using the 4% rule \u2014 divide your current salary by 4% to find your personal number. Using this calculation, if you made the median salary of $62,000, you would need roughly $1.5 million in retirement savings.<\/p>\n \u201cThat means if you have $1.5 million in your retirement account, then you can safely withdraw $62,000 a year,\u201d Sethi explained. \u201cTo me, that\u2019s revelatory. It tells me, I don\u2019t need $5 million or $20 million. I need $1.5 million.\u201d<\/p>\n Started Saving Late? You Can Still Catch Up<\/p>\n Using the 4% rule, you will likely get a number that is more than you will actually need. <\/p>\n \u201cSocial Security will cover some of it,\u201d Sethi said. \u201cMaybe your spending will go down.\u201d<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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\nHow long are you going to live?
\nHow much will you need each year?<\/p>\n