The most common retirement number people hear is $1 million. That number is almost meaningless without context. What matters is your specific annual spending — not some generic benchmark.

Start with your current monthly expenses. Project forward to account for inflation (typically 2–3% per year). Subtract guaranteed income sources like Social Security or pension payments. The gap is what your portfolio needs to cover.

If you expect to spend $5,000/month in retirement and Social Security covers $2,500, your portfolio only needs to generate $2,500/month — about $30,000/year. Using the 4% withdrawal rate, that's $750,000 — not $1.5 million.

Healthcare is the wildcard. A healthy couple retiring at 65 can expect to spend over $300,000 on healthcare in retirement, not including long-term care. This needs to be factored into your number.

• ✓Your retirement number is based on your spending — not a one-size-fits-all benchmark.
• ✓Social Security and pension income reduce how much your portfolio needs to cover.
• ✓The 25x rule (or 4% withdrawal rate) gives a solid starting estimate.
• ✓Healthcare costs, inflation, and longevity risk all increase your required savings.
• ✓A personalized analysis from a financial planner gives you a precise, actionable target.

• ✗Using a generic 'rule of thumb' without accounting for your actual expenses.
• ✗Forgetting to factor in healthcare costs — one of the biggest retirement expenses.
• ✗Ignoring inflation — $60,000 today is worth far less in 20 years.
• ✗Not counting Social Security or pension income as part of your retirement income.
• ✗Waiting too long to calculate your number and then scrambling to catch up.

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