Magic Number for Retirement

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:

  • Housing
  • Automobile
  • Utilities
  • Food
  • Insurance

Next up is the extras

  • Vacations
  • 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.