There are several articles published recently on the Interned, discussing how much money one really needs for retirement.   The numbers, calculations, assumptions are so confusing.  Some articles said that 3-5 million US dollars should provide you a comfortable retirement.  All articles agreed that one million is not enough.  I would say “it depends…”  When and where do you plan to retire?  We calculated that if we would plan to work till 75, and then live in a very simple house in the middle of nowhere, be in excellent health, do not travel, do not go out, maybe one million would be enough for us.

If we plan to retire at normal retirement age (66-67), and then maintain the same level of life we have now (have new cars, eat out, travel, visit museums, theaters, etc.), stay at our current house, and be in good health, than 3-5 million will be nearly enough.  This assumes that the stock market will guaranty a good return. (I hope that my husband will write down his thought on the “investing” topic sometimes in the nearest future since it is a separate big conversation/discussion.)

PLEASE do your homework and run various calculations to receive a better idea where you are financially.  Use more than one calculator from various resources. Make sure that you use very conservative numbers for % return.  And the most important, you need to know how much you are spending now to plug the correct numbers for your calculations.

Surprisingly, almost all of our friends do not know how much exactly they spend annually.  They know approximately, but never had a habit of keeping track of their consolidated expenses. (I will be able to share with you the spreadsheet I’ve created). I am sure they are at least 20-30K off.

Some other calculators that I’ve been using, in addition to one from my brokerage, can be found here:

·       Calculate how much you can spend in retirement

·       Calculators are helpful but beware of shortcomings

·       Use our calculators to determine your retirement needs

Let’s do the simple math.  To live comfortably in our area without spending extremes, a couple usually spends around 100K per year.  So if you plan to live till 92 or so after your full retirement at 67, you will need approximately $2.5 million in savings (excluding medical expenses for serious cases). If you or your spouse have or will have health issues, you may need additional money since the private assistance/aid is not covered by Medicare or supplemental insurance. I even do not want to touch here the cost of the nursing home; we’ve learned this hard way when my mom was hospitalized.  She then went to the rehab center, and then to the nursing home…