How Much Do You Really Need to Retire Comfortably?
Retirement isn’t about hitting a magic number—it’s about funding the lifestyle you want. For high-net-worth individuals, especially those with $800,000 to $1 million in savings, retirement planning becomes more about precision than guesswork. This article will walk you through the key elements of determining your personal retirement number.
Define What “Comfortable” Means to You
The first step is understanding what a “comfortable” retirement looks like. This is deeply personal.
Ask yourself:
- Will you travel internationally each year, or prefer quiet staycations?
- Do you plan to support your children or grandchildren?
- Are you planning to relocate or stay in your current home?
These lifestyle decisions have major financial implications.
Common Benchmarks vs. Personalized Planning
You may have heard of the 4% Rule, which suggests withdrawing 4% of your retirement portfolio each year to make it last 30 years.
With $1 million saved:
- 4% = $40,000/year withdrawal
- Add to that Social Security and other income
But this rule assumes:
- Average market conditions
- No major health events
- Standard cost of living
For many, this rule is too simplistic.
Variables That Shift the Target
- Longevity: People are living into their 90s and beyond. Planning for a 30+ year retirement is now standard.
- Healthcare: Costs are rising, and Medicare doesn’t cover everything. You may need long-term care or supplemental insurance.
- Inflation: Even modest inflation erodes purchasing power over decades. Today’s $100K won’t go as far in 2045.
- Housing: Will you pay off your mortgage or continue paying rent/taxes/maintenance?
- Lifestyle: Travel, hobbies, philanthropy, and family support all impact spending.
Reverse-Engineering Your Retirement Number
Here’s a simple method:
- Estimate your annual retirement expenses
- Subtract guaranteed income (e.g., Social Security, pensions)
- Multiply the remainder by 25 (to mirror the 4% Rule)
Example:
- Expenses: $90,000/year
- Income: $35,000 (Social Security)
- Gap: $55,000
- Needed portfolio: $55,000 x 25 = $1.375 million
This calculation provides a starting point—not a finish line.
Why Professional Planning Matters
A financial advisor can tailor these assumptions based on your:
- Risk tolerance
- Family health history
- Income tax bracket
- Investment timeline and style
At Winthrop Partners, we specialize in guiding near-retirees with $800K to $1M in savings toward a sustainable, tax-smart retirement strategy.
Common Missteps to Avoid
- Ignoring inflation in retirement models
- Underestimating healthcare costs
- Assuming expenses will drop dramatically in retirement (they often don’t)
- Over-relying on Social Security
Final Thought
How much do you need to retire comfortably? The answer depends on you. But with the right guidance, your comfort can become a well-planned reality.
Ready to run your numbers together?
Ryan Carney is a Partner at Winthrop Partners. With nearly 10 years of experience in financial services, Ryan began his career with Fidelity Investments and First Niagara Financial Group. In 2018 he was named by Buffalo Business First’s as a “30 under 30” honoree. He earned his B.S. in Economics from Bowdoin College and is a Certified Financial Planner.