To be financially secure in retirement, you’ll need to have enough savings to carry you through your lifetime. With the typical retiree exiting the workforce in their mid-60s, it can beg the question: How much do I need to retire comfortably at 65? While there isn’t a one-size-fits-all number, the following starting points can give you a sense of just how much you’ll need.


Before you start crunching numbers, you’ll first want to have a frank conversation with both yourself and your partner about what you want your ideal retirement to look like. Do you see yourself staying close to home and spending your days babysitting the grandkids? Or do you have your sights set on traveling the world or retiring abroad? The idea here is to clarify your retirement vision so that you can get a rough estimate of how much it will cost and give a number for the amount of income you will need to generate with your savings. Remember to be flexible with this number to account for unforeseen circumstances, such as an unexpected health issue.


While the ideal retirement will vary from person to person, the 4-percent rule may give you some guidance. With this rule, you withdraw 4 percent from the total value of your retirement savings during the first year you retire. After that, if you continue to withdraw 4 percent annually (plus a little extra to account for inflation), you can reasonably expect your savings to last you at least 30 years. So, if you see yourself needing to generate about $120,000 a year in retirement from your savings, according to the 4-percent rule you’d need about $3 million saved for retirement to support that lifestyle for 30 years.

Of course, the 4-percent rule is far from perfect. For one thing, you may end up being retired longer than 30 years. It also relies on the assumption that your investment portfolio is 50 percent stocks and 50 percent bonds. Because everyone’s risk tolerance is different, you may have a different asset mix. What’s more, you might not see the expected long-term returns in today’s low interest rate environment. So, treat the 4-percent guideline as a jumping-off point, rather than as a hard-and-fast rule.


The ideal retirement plan involves generating multiple streams of income. In addition to cash reserves, this might include a 401(k) or an IRA, as well as guaranteed income from Social Security, pensions, annuities or accessing cash value* from whole life insurance. As you approach retirement, you may need to make tweaks to ensure you’re meeting your needs, retirement vision and long-term goals. This could involve rebalancing your portfolio, increasing your savings rate, or taking steps to lock in additional sources of guaranteed income. By doing this, you’ll protect yourself from market volatility and help relieve any concerns you may have about outliving your money.

While the question, “how much do I need to retire comfortably at 65?” doesn’t have a simple answer, working with a financial advisor can help you arrive at a target number you feel good about.

*The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.

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