Let's Talk... How Much You Need To Retire

Today I want to quickly touch on how much you need to retire, and how to get there.

A Northwestern Mutual study found Americans need $1.46 million to comfortably retire.

That’s up 15% from the $1.27 million in 2023, and 54% from the $951k in 2020.

And with inflation where it’s at, I wouldn’t be surprised if it’s up another 15% in 2025.

Either way, Americans need some serious dough if they ever plan to retire.

So how can you get to the magical number of $1,460,000?

Well, a good start is maxing out your IRA.

In 2024, an individual retirement account (IRA) has a contribution limit of $7,000 ($8,000 if you’re age 50+)

Broken down that’s…

• $583 per month

• $134 per week

• $19 per day

Assuming a 10% return (the S&P 500 average annual return), you’ll have roughly…

• $1.3 million in 30 years

• $2.2 million in 35 years

• $3.6 million in 40 years

Not as scary as you thought huh?

And if you think you’ll need more than that in retirement, you can always extend your time horizon, or invest more by contributing to a 401(k), health savings account, or brokerage account.

Fidelity has a cool retirement calculator if you want to play around with the numbers.

Hope this puts your retirement anxiety at ease.

Darrell