How Much Do You Really Need to Retire Comfortably?

Disclaimer: This newsletter is for educational purposes only and is not personalized financial or investment advice. Consult a qualified professional before making financial decisions.

How Much Do You Really Need to Retire Comfortably?

As inflation continues to rise, one question stands out for anyone thinking about financial independence: how much do I need to save for retirement?

A million dollars doesn’t stretch like it used to, so understanding how much you need to retire comfortably has never been more important.

Here we’ll examine what is a good and reasonable target.

Step 1: Calculate Your Average Monthly Expenses in Retirement

According toThe Motley Fool, as of 2023, the average monthly expenses in retirement for U.S. households total around $6,440. Of that, roughly $2,120 goes toward housing.

But consider this: a worthy goal of retirement is to be debt-free. No mortgage, no car loans. That changes your average monthly number.

Total monthly expenses (with mortgage): ~$6,500
Total monthly expenses (without mortgage): ~$4,500

So if you’re on track to be debt-free, your basic living expenses in retirement could comfortably be around $4,500/month.

Of course, everyone will have their own unique standard of living. Some are comfortable on less, and others can’t imagine spending less than $10,000/month. Either is fine—but we’re working with generalities for the sake of this illustration.

Step 2: Use the 25x Rule to Estimate How Much You Need to Retire

The Federal Reserve targets 2% inflation on average over many years, but it’s likely to be elevated over the next decade—estimated closer to 2.3%.

Using this figure, let’s project average expenses over time:

*Note: If reading this on mobile, turn your screen horizontal for a better view of the chart.

Years to Retirement	Monthly Expenses (Debt-Free)	Annual Expenses x 25	Monthly 1x Social Security Est	Adjusted Needed Savings
10	$5,650	$1,695,000	$2,500	$945,000
20	$7,100	$2,130,000	$3,150	$1,185,000
30	$8,900	$2,670,000	$3,950	$1,485,000
40	$11,200	$3,360,000	$4,950	$1,875,000

Quick takeaways:

The 25x rule (multiply annual expenses by 25) gives a rough target for your nest egg.
Social Security can reduce the amount you personally need to save.
These calculations account for one average Social Security check. If two checks are being received, this reduces the need even further.
Even if retirement is decades away, $2 million is usually enough for average expenses, assuming debt-free living and careful planning.

The 25x rule for retirement is one of the simplest ways to estimate your retirement target.

Simply multiply your annual expenses by 25 to find your approximate nest egg. This method, used by many retirement savings calculators, helps you answer the question for yourself: is $2 million enough to retire comfortably?

Whether or not you’re on track yet to hit the 25x number, take a look at this strategy to make your retirement withdrawal strategy more efficient:How to Increase Retirement Income (Without Running Out of Money)

Step 3: Plan for Retirement Early and Build Financial Independence

Retirement planning is more than just hitting a number. It’s about:

Paying off debt before you retire
Maintaining a lifestyle that feels comfortable
Accounting for inflation and healthcare costs

For many households, it’s possible to retire on 2 million comfortably, especially if you’re debt-free and plan to maintain a modest lifestyle. Even 1 million might be enough to retire in lower-cost areas, though this depends on your personal spending needs, additional income sources like Social Security, andwithdrawal strategy.

Retirement Matters—But Your Life Doesn’t Have to Wait

Planning for retirement is important, but at The Wealth Expedition, I focus on helping you make meaningful progress today.

That means not waiting 40 years to start living the life you want.

Beyond hitting a number, understanding how to plan for retirement early means designing a life that’s debt-free, flexible, and purpose-driven. True financial independence and retirement savings goals go hand-in-hand with building habits that support freedom and abundance today.

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That means setting short- and intermediate-term goals and using strategic financial planning to buy back your time, flexibility, and purpose, all while steadily growing your nest egg.

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Wait decades and risk losing precious time and opportunities.
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If you’re wondering how much you need to retire or still considering how much to save for retirement, this is where your journey begins. Use your retirement savings goal not as a finish line but as a map, one that leads to flexibility, freedom, and purpose.

Let’s embark on this journey together.