How much money do I need to retire?

There is no simple answer to the question ‘how much money do I need to retire?’ It depends on many factors, including at what age you plan to retire, your lifestyle, current and future spending habits, types of assets in your portfolio, and much more.

While it is difficult to assign a dollar amount that will apply to most people, it’s important to start with a few guidelines and rules of thumb around retirement planning to set you, your spouse and your family up for success.

Begin with a plan

A sound plan is a starting point to a successful and happy retirement. That begins with defining what retirement means to you. Do you plan to travel? Start a business? Continue working part time? Answers to these questions can impact your financial picture now and in the future.

Outline your retirement goals while you are still working, how much you are or plan to save for retirement each year and how much you plan on paying yourself in retirement.

At FSA, our financial advisors leverage the FSA CARES process to evaluate and help clients plan for the future. FSA CARES stands for:

Consultation: Understanding your unique financial goals and aspirations.

Analysis: Conducting a comprehensive assessment of your current financial situation.

Recommendations: Providing personalized recommendations and strategies.

Execution: Implementing the agreed-upon financial plan.

Support: Offering ongoing support, monitoring progress, and making necessary adjustments.

Each person’s financial picture looks a little different and there’s no one-size-fits-all way to retire. To understand yours, speaking with an experienced financial professional is a great place to start.

Consider a few rules of thumb

While they tend to oversimplify the process, there are a few principles to consider that could apply to your unique situation.

The income gap formula: FSA’s financial advisors utilize a formula to help estimate a gap in income once you retire and no longer have a salary. The resulting income gap depends on a variety of factors including fixed income like social security, health care expenses, paying off your home, etc. Advisors utilize this information and the average retirement account withdrawal rate to determine the ideal amount you’d need to retire.

The working-to-retirement income transition: To enjoy the same lifestyle you did prior to retirement, some recommend having between 60%-100% of your annual pre-retirement income. This number will depend on additional factors like expected length of retirement and inflation.

Income multiples: Another way to calculate a retirement income range is planning for 10-12 times your annual income at the age of retirement. For example, if you plan to retire at 65 and your income is $180,000 at that time, the general guideline suggests that you should have between $1.8 million and $2.16 million set aside for retirement.

In any case, you’ll have to estimate how many years you think you’ll have in retirement. While it’s impossible to know for sure, the average life expectancy in the U.S. in 2021 was 76.4, or 73.5 for men and 79.3 for women.

Market fluctuations can also impact your portfolio and, in turn, your retirement outlook. It’s important to take into account inflation, potential changes to tax codes, social security status, and other outside factors.

What’s next?

Retirement planning is about much more than money in the bank. It’s about developing a plan and finding a partner that can help bring you closer to achieving your goals and help provide peace of mind.

LEARN MORE: Interested in simply learning more about the retirement planning process? Read about FSA’s process and the impact a comprehensive retirement plan can have.

READY FOR RETIREMENT? Ready for a more personalized look at your retirement readiness? Take FSA’s Free Retirement Quiz to see where you stand and what steps to take next.

ATTEND A DINNER SEMINAR: Want more tips on planning for retirement? Come see us at an upcoming seminar near you!


Insurance products are offered through the insurance business Financial Services of America (FSA). Financial Services of American (FSA) is also a Financial Services practice that offers securities products and services through AE Financial Services, LLC (AEFS), member FINRA/SIPC. Financial Services of America (FSA) is also an Investment Advisory practice that offers investment advisory products and services through FSA Advisors (FSAA), a Registered Investment Advisor. AEFS and FSAA do not offer insurance products. The insurance products offered by Financial