3 Hard Truths About How Much You Need to Retire


The average American has about $73,000 saved and more than $98,800 set aside for retirement.

Yet the hard truth is that most Americans couldn’t save for retirement, even if they wanted to.

For example, the average American household owes over $92,700 in debts. Meanwhile, the typical American worker is only making about $48,700 annually in salary. That is the equivalent of a $936 weekly salary.

Too many Americans are playing catch-up with their bills and debt to consider saving for retirement.

And while it is welcome news that so many Americans are taking retirement more seriously now, $99,000 won’t be nearly enough to accomplish the task. And if you are middle-aged and nearing retirement age, $98,000 just won’t cut it.

Here are some reasons why.

Annual living expenses

Unless you plan to live in an area with a very low cost of living, $99,000 is not going to last you.

The average retiree needs to spend at least $45,000 annually to cover their living expenses. This is especially true for retirees who will spend their retirements living in large, high cost of living metropolitan cities.

Even if you move to a small town, $99,000 will not last very long.

$3 million is the new $1 million

The old, generalized standard for a retirement number was to try to save at least $1 million dollars for a retirement plan.

That estimate was just a generalized guess.

But for argument’s sake, if you had a $1 million nest egg, it would last you 23 years in Mississippi. Yet the same million-dollar retirement would last about 15 years in Alaska. And a million-dollar retirement would last you a decade in Hawaii.

Unless you plan to live in  Mississippi, a $1 million retirement plan will not last. When you factor in inflation and continually rising cost-of-living standards, a $3 million retirement nest egg should be the new benchmark.

Outliving retirement

Finally, there’s the issue of longevity. The average person lives to be about 80 years old.

So, if you retire at 65, you need enough money to last 15 years.

And since many people are now living into their 90s, your real retirement target should be to have enough to last you for at least 20 years.