As retirement approaches, many wonder how much savings they’ll need — especially if they plan to retire at 65 instead of the full retirement age of 67. A common rule of thumb is $1 million, but there’s no one-size-fits-all answer.
With lifespans often stretching 30 years past retirement, your strategy must be personalized and sustainable. So whether you’re counting down the days or still have a few years to go, this guide will help you navigate the path to financial security.
Traditionally, financial advisors recommended saving multiples of your salary — three times by age 40, six times by 50 and over eight times by 65. So, someone earning $40,000 to $100,000 annually would need about $340,000 to $850,000 by age 61-64.
However, with the full retirement age now at 67, and economic shifts affecting costs and returns, old rules like the 4% rule — where $1 million yields $40,000 annually — may no longer be sufficient.
Find Out: How Far $1.5 Million in Retirement Savings Plus Social Security Goes in Every State
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Today’s experts recommend saving closer to $1.5 million to retire comfortably. Following the 4% rule, this would allow $60,000 per year in retirement income. That extra $20,000 provides a buffer for rising costs, unexpected expenses and a better quality of life.
This figure isn’t arbitrary, either. It reflects rising inflation, changing interest rates and fluctuating job markets. Retirees need more to maintain the same lifestyle previous generations could with less.
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Location: Where you live heavily influences your retirement budget. Living costs vary across the U.S., so your savings goal should reflect your local expenses and future financial plans.
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Marital status: Married couples benefit from dual Social Security checks, and one partner can delay claiming benefits for a higher payout. But after one spouse passes, the survivor only receives the larger check. Fixed expenses remain unchanged, so plan for the loss of income.
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Healthcare, housing and lifestyle: Beyond daily living, retirees must budget for healthcare, home upkeep, travel and leisure. Ensuring your nest egg can cover these without financial stress is critical.
In July 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA), impacting retirement and Social Security. Here are some key takeaways:
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It doesn’t eliminate Social Security benefit taxation but adds a temporary senior bonus deduction — $6,000 for single filers or $12,000 for joint filers aged 65-plus from 2025-2028.
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Retirees working part time may deduct up to $25,000 in qualified tip and overtime income (with income limits).
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These deductions could exempt about 90% of retirees from paying income tax on Social Security.
