It is always amazing to me when I read articles that suggest a magic number for retirement. I don’t think there is one magic number that you need to reach in order to retire. I will tell you every couple has a different set of expenses and varying income levels. There isn’t an easy solution. I work with people to not only save for retirement but spend in retirement.
I look at the basic living expenses, what you need to keep the lights on. This includes:
Next up is the extras
- Education Savings for grandchildren
- 2nd homes
- Helping out children financially
After we review the expenses, we look at income sources. Each income source is a ‘bucket.’ Buckets include social security, pensions, savings, 401k, and other retirement savings plan. We then look for the holes and come up with a plan.