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How much you need to retire depends on your lifestyle and income goals, but financial advisors generally recommend saving 10-12 times your final salary or having enough to replace 70-80% of your pre-retirement income annually.

As you prepare for retirement, just remember: savings targets are guidelines, not guarantees. With each person bringing unique situations and needs to the table, the exact numbers depend on your retirement age, lifestyle expectations, healthcare costs, inflation, longevity and Social Security and other income sources.

These guidelines are helpful starting points, but ultimately, retirement planning usually requires personalized calculations based on your specific circumstances. All that said, the following milestones can help you determine whether you’re moving in the right direction and keeping pace with what you’ll need for a comfortable future.

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Understanding the costs you’ll personally face is essential for having the dream retirement you’re looking for.

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RETIREMENT SAVINGS RULES OF THUMB

Looking at the total number you believe you’ll need for retirement can seem a bit daunting, especially if you’re not sure how to take the necessary steps to save that much in your account. To help, there are three guidelines that can give you a good jumping-off point as you begin putting money aside.

THE 10-12X SALARY RULE

Help set yourself up for success by saving at least 10-12 times your annual salary by the time you turn 67, if you plan to retire at this traditional retirement age. For example, if you earn $100,000 annually, you’d shoot to save between $1 million and $1.2 million by the time you’re ready to exit the workforce. Or, if you make $150,000, your savings target would be between $1.5 million and $1.8 million.

This general rule is often used as a strategic long-term savings plan to put money aside each year, not touching it until it's accumulated to a large sum that could make a huge impact in retirement. This is extremely useful, but some limitations can make this process difficult:

• Lifestyle differences
• Early retirement
• Higher-income households

The best thing you can do if you’re in one of these boats is to speak with your financial advisor to determine the best path forward. These professionals can assess your current financial standing and help you make appropriate investment decisions that are designed to work for you now and in the future.

THE 70-80% INCOME REPLACEMENT RULE

To account for lifestyle differences, planning to spend about 70-80% of your preretirement income each year after you finish working can be a good target. This figure assumes you keep your lifestyle relatively stable to what it is currently, but with somewhat lower costs when you won’t be required to commute, maintain a work wardrobe, pay payroll taxes or make 401k contributions. This is variable, of course, depending on your own situation.

By sticking to this general rule of thumb, you could continue living life the way you want without sacrificing many of the comforts and conveniences that you’ve had in your working years. Plus, it helps ensure that you plan ahead and avoid unnecessary surprises that can cause financial strain.

Certain variables can change this estimate, and it’s important to be aware of these considerations and more as you think about spending in retirement:

• Housing
• Travel
• Social activities
• Healthcare costs

THE 4% WITHDRAWAL RULE

A suggestion many retirees should consider following is withdrawing about 4% of retirement savings in the first year. In each following year, adjust that withdrawal amount for inflation. The goal is to provide a steady income stream while helping retirement funds last for several decades. For example, if you retire with $1.0 million, you’d withdraw $40,000 in the first year, and then increase that amount for inflation – for instance, $41,200 if inflation is 3%.

While the rule can offer a good starting point for budgeting and long-term planning, it’s important to remember that individual circumstances – such as lifestyle needs, healthcare costs and life expectancy, as well as market performance – can influence the ideal withdrawal rate. For this reason, many retirees use the 4% rule as a general benchmark rather than a strict formula.

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AGE-BASED RETIREMENT SAVINGS BENCHMARKS

While there’s no single retirement number that works for everyone, it’s helpful to keep track of your progress based on your age. But this is a general guideline, not a rigid requirement. Saving more than average doesn’t mean you’re doing everything right, and saving less than average doesn’t mean you’re doomed. But it’s human nature to compare and doing so may give you a sense of where you’re at and where you’d like to be with your savings.

With these averages in mind, it’s vital to remember that these numbers are based on the assumption that you’d be saving consistently throughout your career. This type of plan doesn’t work if you don’t have set steps in place that you follow throughout your working years.

Additionally, if you’re behind on a milestone or have slowed down your savings due to pressing financial costs, retirement could still be within reach. Your financial advisor can look at your particular goals and retirement wishes and create an individualized plan designed to help get you closer to your goals. They can also assist you in deciding to adjust your savings rate, retirement age or spending expectations to help close any gaps.

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WHAT CAN CHANGE YOUR RETIREMENT NUMBER?

Retirement milestones provide a strong estimate for future saving and spending needs, but several factors can significantly affect the amount you need. Key variables include:

HEALTHCARE COSTS

While Medicare kicks in once you turn 65, retirees still have plenty of health care expenses. First, there are the premiums – contrary to popular belief, Medicare isn’t free. There are also out-of-pocket costs, like deductibles and copays; plus, Medicare eligibility and supplemental coverage can affect planning needs. Depending on your Medicare plan, you may also have vision, dental and prescription expenses.

A 2026 report by EBRI found that some couples may need up to $469,000 in savings to cover their healthcare expenses in retirement. But if you’re generally healthy and continue to emphasize good lifestyle choices, and your family medical history is good, you may spend less. The flip side can also be true, of course.

Don’t overlook long-term care as a potential and substantial cost. Medicare doesn’t cover it, and if you need it, it can cost hundreds of thousands of dollars. While you’re thinking about long-term care, consider the type of care you’d want. A nursing home may not cost as much as a higher-end assisted living facility, which might be cheaper still than full-time in-home care.

Planning to retire before 65? Health insurance may be a major expense during those years when you’ve lost employer-sponsored insurance but can’t get Medicare yet. A financial advisor can be a valuable partner in helping you determine, at a high level, what insurance you may need.

INFLATION

Even with a good amount of money saved up, rising prices reduce the purchasing power of that money. This means that the same amount of savings may cover fewer expenses in later years. Because of this, many financial plans��assume that living costs will increase over time. Factoring inflation into your strategy as much as possible helps ensure your savings can support your lifestyle throughout retirement, even as everyday expenses continue to rise.

LONGEVITY

Life expectancy in the United States is on the rise, with the average person living to 79 years, up by 0.6 years in 2023. This is great news, but it also means retirement savings must stretch further than in the past. It’s not uncommon for retirement spending��to span 15 years or more, especially for those who retire in their early or mid-60s.

Planning for a longer lifespan helps reduce the risk of outliving your savings and can influence decisions about how much to save, when to retire and how to structure your income throughout retirement so it continues working for you rather than the other way around.

SOCIAL SECURITY BENEFITS

Social Security is a key source of retirement income for many people, but it typically replaces only a portion of their pre-retirement earnings. The age at which you choose to claim benefits can significantly affect how much you receive each month: claiming early reduces your benefit, while delaying may increase it.

Social Security payments aren’t federally taxable��until you reach a combined income of $32,000 for those who are married filing jointly or $25,000 for single filers. Up to 85% of your benefits can be subject to tax if you and your spouse have a combined income of more than $44,000 ($34,000, if single). Combined income in this case means half your Social Security benefits plus all your other income.

EARLY RETIREMENT

While the typical retirement age is 65, careful planning and saving can enable you to step into the next phase of your life earlier than anticipated. This gives you more time to enjoy your non-working years, but also requires additional savings to make up for the loss of your salary.

Additionally, because Medicare eligibility generally begins at age 65, early retirees may need to pay for private health insurance or other coverage until they qualify. These added costs and the longer your savings may need to last can impact the amount you need to set aside before leaving the workforce.

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IS $1 MILLION ENOUGH TO RETIRE?

This age-old question doesn’t have a completely clear answer: While $1 million can be enough for some retirees, it depends on multiple factors, like lifestyle preferences, location and healthcare spending. This amount is surely a large sum of money, but it also has to last throughout your entire retirement. If you look at it through the 4% rule, a $1 million portfolio could provide about $40,000 per year, which may suffice if this equals about 70-80% of the income you’ve lived with for your working years.

To determine if this amount is enough to retire for you personally, consider these elements:

• Social Security benefits may supplement income, helping your money stretch further
• Spending levels vary widely, making your situation unique
• Housing costs and location can affect retirement affordability

If you’re looking to retire with $1 million in your savings account, choosing to settle down in a low-cost state, spending less on non-essentials and following the 4% rule can help make this a reality. Just be sure to speak with your financial advisor to determine if this is the correct path for you.

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HOW TO CALCULATE YOUR PERSONAL RETIREMENT NUMBER

You’re probably used to creating a budget, and after all this time, you know roughly how much to allocate to different expenses. But coming up with a retirement budget can be challenging because there are so many unknowns. You might not know yet where you’ll live, if you’ll downsize, how healthy you’ll be or what you’ll spend your time doing. And of course, no one knows how long they’ll live.

Many online retirement calculator tools will estimate how much you’ll need to save based on your current income and theoretical retirement timeline. There are also best practices, like the aforementioned 4% rule, that start with your retirement savings and tell you what that equates to in yearly withdrawals. Or you can flip it and start with your desired spending, then multiply by 25 to get a total amount of savings needed.

But the reality is that rough guidelines and impersonal estimates aren’t likely to exactly match your reality, and you could end up saving too little or working longer than you actually need to, based on your real-life needs and plans.

To estimate your retirement number, follow these steps:

• Estimate annual retirement spending
• Identify guaranteed income sources (Social Security, pensions)
• Calculate expected withdrawals from savings
• Consider taxes, inflation and healthcare expenses
• Evaluate retirement age and longevity expectations

And remember, your financial advisor is here to help answer the question, “How much will it cost me to retire?” They have experience dealing with potential moving scenarios, health care in retirement, the taxation of different kinds of assets and income (and strategies to help mitigate those taxes) and a range of market and economic environments. With professional advice, you can learn about tax-efficient withdrawal strategies, investment allocation adjustments and income planning – vital best practices to help maximize your retirement savings.

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TIPS FOR MANAGING RETIREMENT COSTS

Here are some ways you can maximize your retirement savings:

HOUSING

When you’re looking to save money, a good place to start is always housing costs. There are several strategies you could consider, including:

• Downsizing your home. In the current environment, it’s tempting to use your equity to pay cash for a smaller house and get rid of a mortgage payment, especially with interest rates higher than they’ve been in decades. You might be surprised to know we generally recommend you get a 30-year mortgage, even if you can afford to pay in cash and are retiring.
• Relocating. Moving to a lower-cost region or from an expensive city to a suburb may help. You don’t want to plan on this without thinking it through, but it can make a huge difference if you’re currently in a high-cost area.

TAXES

Reducing taxes should also be an area of focus, especially if you have a lot of savings. You’ll want to be strategic about taking Social Security, planning early for Required Minimum Distributions, realizing large capital gains (like from selling a house) and drawing down your assets so you can avoid paying way more in taxes than you need to.

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Your advisor can connect you with our team of tax planning experts to help ensure you’re doing all you can.

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EVERYDAY COSTS

Take advantage of your new free time to lower your everyday costs. Shop around for deals, cancel unused subscriptions, find cheaper insurance, cook at home instead of eating out – whatever works for you.

HEALTH CARE

You can save money on health care by comparing provider costs before having procedures done, choosing generic prescriptions and making sure to stay in network. You’ll also want to be thoughtful about choosing a Medicare plan and reviewing it regularly to make sure it’s still the most cost-effective.

But perhaps the biggest way to spend less on retirement health care is through preventative steps:

• Have all your recommended preventative visits and tests every year – they’re generally fully covered by insurance
• Eat a healthy diet as much as possible
• Make regular exercise a priority, whether it’s walking, swimming, fitness classes or whatever you prefer
• Keep your mind sharp – this can mean pursuing hobbies, doing daily puzzles and games or taking classes

INCOME

It’s not just about reducing your costs; you can also consider increasing your income. This can mean taking on part-time work or starting a side hustle business. It can also mean delaying Social Security benefit payments so your payout gets bigger. Your advisor can help you decide what makes sense for you.

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CREATING A RETIREMENT PLAN THAT FITS YOUR GOALS

Retirement planning involves more than hitting a single savings number. Expenses are highly individual and influenced by factors like your lifestyle preferences, health care needs and geographical location. Daydreaming about retirement is fun, but it can also be practical because to know how close you are to exiting the workforce, you’ll need to know what your retirement is going to look like.

Early planning can help you create a comprehensive budget that accounts for variables like inflation, potential health care costs and your desired retirement lifestyle. As part of that, you’ll need to take into account any relocation or downsizing, supplemental income sources, and a look at your overall tax picture.

Your financial advisor can help you talk through your plans and come up with strategies to help you reach your retirement goals and make your money last through retirement. Connect with an 91���� Engines advisor today to discuss your savings goals and start preparing to retire when and how you’d like.

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