How Much Money Do You Need For Retirement?

December 11, 2015, by Ken Jorgustin


Do you need a million dollars (or more) for retirement? When researching facts and figures, online search results often turn up retirement calculators from various financial institutions, brokers, investment/fund companies and others. The results from these retirement calculators may surprise or even shock you…

The thing is, there are things that you can do to drastically reduce the shock and to lower the financial figure that may seem (or actually be) impossible for you to attain…

It’s called retirement preparedness…

I am not going to compare and analyze specific figures (you can do that yourself if you’re inclined). Instead I’m going to offer up a few logical and general suggestions.

First of all, these institutions all have an incentive for you to invest with them. They exist to make a profit and to separate you from your money. So be careful.

Next, as of this article’s post date, we are living in financially-economically uncertain times, despite the propaganda of the mainstream financial alphabet channels. For those who have peeled back ‘layers of the onion’, you know what I mean… With that said, I personally would not blindly accept the mainstream ‘status quo’ that things (markets, investments, financial institutions) will be ‘good’ for the foreseeable future (normalcy bias). On the contrary, I personally would plan for the opposite – future economic financial turmoil. In fact, it’s a mathematical certainty that things are going to hit the fan sometime into the future…

With that in mind, here are my suggestions:

When you’re considering how much ‘money’ you need for retirement, you need to consider this question: “What is money?”

Most people think of money as those green pieces of paper that are printed up for the Federal Reserve – which they loan to us and the government for our spending pleasure. The higher the number on the paper, the more ‘money’ it’s worth. But is that paper really ‘money’??

Answer: No. The paper (and the ‘modern’ electronic versions thereof) is currency. They represent ‘the fruits of our labor’ or other such acquisitions. It is accepted so long as there is ‘faith’ in it. After all, it’s just paper, and the electronic digits are just ‘nothing’…

I personally look at ‘money’ more-so as tangibles that I consider to be assets for me and mine. The things that I own, and I mean ‘own’ – as in there’s no loan or debt owed on the ‘thing’ or ‘things’. That’s money (partly).

To keep this in context with the notion of how much you need for retirement, you need to look at what you truly own or what you need to own before you retire. Reason being that you do NOT want any debt going into retirement. Unfortunately today’s consumption lifestyle and that of keeping up with the ‘Joneses’ has really entrapped a huge percentage of people – including those middle aged and older (be careful, time goes by faster than you might think…). A 30 year mortgage is a LONG TIME to pay – and amounts to a shocking amount of interest paid over the term of the loan!

In order to be able to retire without a very large ‘nest egg’, you MUST reduce or have a very low cost of living (and lifestyle). And this is the crux of the problem. Most people seemingly cannot lower their standard of living enough to get there…

Those online retirement calculators are mostly right – when you consider that the results are presuming that you still will live a modest lifestyle of spending and consumption. The thing is, you must greatly reduce your financial expenditures in order to reduce the need for a large ‘lump sum’ of currency going into retirement.

How do you do that? That’s up to you. Only you know what you’re spending. Some very hard choices may be required. You may have to move to a more suitable location. You may have to sell off a few things. You may have to curb your current lifestyle. But you know what? You may find that you’re happy with less – and with less stress.

Unless the world goes SHTF (then all bets are off…), to retire, there are certain expenses that will simply never go away, and you need to plan for them. Taxes – property taxes. Even though you may own your home outright, if you are unable to pay your property taxes you may likely eventually lose your home (so much for ‘truly’ owning your property). Some states, counties, towns, and regions have MUCH higher property taxes than others. Property taxes will NEVER go down and will always creep higher, so plan for this. (You may have to move.)

Why do you need that ‘big house’?? Answer: You don’t! With a big house comes big taxes and big expenses. To retire with a lesser ‘nest egg’ you need to live much smaller. And guess what… smaller is easier! And let me tell you this as an aside… ‘Manufactured Mobile Homes’… I’ve seen some of these ‘mobile homes’ and they can be pretty darn nice on the inside (and creatively on the outside) for just a fraction the cost of a traditional ‘home’ (just a thought). For example, I know someone who is currently selling their previous mobile home for $25K and it’s amazingly nice inside and great shape outside. How’s that compared to spending $100K, $200K, and more for a ‘house’?!

These are the types of things you need to consider. Downsizing.

Also, downsize your lifestyle of spending. It’s habit to spend. We’re programmed to buy stuff we don’t really need. They’re mostly ‘toys’. Be real with yourself and force yourself to recognize that you don’t need all this stuff. If you can afford it, then great. If you’re looking to retire with less then you better look inward.

Stop going out to eat. Start cooking yourself. Stop buying the multi-dollar coffee every morning. Start shopping frugally. Look at your monthly expenses and REDUCE them. There’s always a way. This is a lifestyle change that may be very difficult for many, but it is what you need to do. Think ‘small’.

If you can go into retirement with ZERO debt and minimal monthly expenses, then you stand a chance to make it without a huge ‘nest egg’ of cash.

Will Social Security payments be enough? Will Social Security even be there? First of all, if Social Security is not there, then we will have already gone through a great upheaval in this country, and this article no longer applies (we will be in a SHTF world if this happens). With that said, every year the federal government updates the amount that you would receive at retirement based on your historical income. This information is made available to every American with a social security number at

Inflation. The dollar is only ‘worth’ a fraction of what it once was. Just a few percent of its original value. While we’re getting closer to zero, you must understand the concept that ‘things’ will likely cost more in the future. And when you retire and you don’t have a working income that somewhat keeps up with inflation, then this concept (of dollar devaluation) is VERY important. The more things (tangibles) that you acquire now while you’re working and able to do so (the things that will help you during retirement – whatever that may be for you), the better off you’ll be. The idea being that you want to go into retirement without needing to buy another vehicle (at least for a long time), or needing to do a major expense to your home, etc… Prepare for it now (the tangibles) while you are better able to do so.

Put your currency to work for YOU with tangible practical assets that you acquire and possess. While I will not completely discount giving some of your money to a financial institution for investment purposes, I will suggest that you get your own house in order first… because in an all-out crash, that money might be ‘gone’. Poof.

Okay I’m up to 1300 words here, and I’ll stop at this… There are so many additional ways to live smaller so as to retire with less.

Let’s hear from you with your further thoughts, ideas and suggestions.

Note: Here’s a tip! You can also choose to retire early, if you do it right! What a concept, yes? Or just work ‘part time’… and enjoy YOUR life instead of slaving it away to your employer πŸ˜‰