13 Jun Do you need $1,000,000 to retire?
“DO YOU REALLY NEED A MILLION DOLLARS IN RETIREMENT SAVINGS?” an article in USA Today, written by Daniel deVise dated, June 7, 2024, interviewing economist, Andrew Biggs:
Investment firms and news headlines are telling us that $1 million in the bank is needed to retire comfortably. But most Americans retire with nowhere near $1 million in savings.
Biggs says “retirement planners overstate how much income retirees actually need, and how much they will spend, essentially as a way to drum up business. “Other financial professionals are saying that 1.46 million are needed to retire in style.” “It’s impossible to find any evidence that seniors need even a fraction of $1.46 million in savings to be financially secure.”
In a federal survey, the typical senior who reported a satisfactory retirement had $50,000 – $100,000 in savings and the average person ages 65-74 have about $200,000 in a retirement account.
” While that sum is “hardly extravagant,” he wrote, “a typical couple can expect an income more than twice the elderly poverty threshold before they touch a penny of their own savings.”
There are many factors that can adjust the amount you need in savings. Where you live, will there be a mortgage payment, or healthcare needs are factors that will impact how much savings you need.
What if you are much further away from retirement (20-30 years away), it’s important to continue to save for your future. You have time on your side and the benefit of compound interest.
While $1 million may be a good benchmark, it’s crucial to personalize retirement plans based on your lifestyle, health and financial goals. Regularly reviewing and adjusting your savings strategy can help ensure financial security in retirement, whether you’re decades away or it’s just around the corner!
Having access to principal and income during retirement can be a useful strategy that can help overcome inflationary increases on expenses.
Ask us to show you a comparative retirement distribution calculation. Also, let us know what your think about Mr. Biggs point of view. Send your comments to info@sandawealth.com.