You may have heard that you need at least $1 million in the bank to retire. The truth is, a comfortable retirement will look different for everyone. Some people might need much more than that, while others may only require around $700,000 to retire comfortably.

**So what’s a more realistic minimum number you should aim for?**

### Why the $1 Million Rule Doesn’t Work for Everyone

Retirement costs can vary greatly depending on where you live, your health, whether you have a mortgage, and the lifestyle you want to maintain. For example, if you plan to retire abroad in Thailand, your retirement budget will look completely different than if you retire in New York City.

“People fixate on round numbers, but the right amount is personal,” said Ben Storey, Retirement Strategy Director at Bank of America’s Merrill. “It depends on your income needs, location, and how long your retirement might last.”

“Tempting as it is to put a single number on retirement, the answer to how much you’ll need to save really depends on the life you expect to lead,” he added.

If you need help figuring out what your number is, here are a few classic benchmarks financial planners use to estimate how much you need:

– **The 4% Rule:** This rule states that you can safely withdraw 4% of your retirement savings in the first year, then adjust that amount for inflation annually, ideally lasting for 30 years.

– **Rule of 25:** This is essentially the reverse of the 4% rule. Multiply your expected annual expenses by 25. This is roughly the amount you’d want to have saved.

– **Salary Multiples:** Some advisors suggest having 8 to 10 times your final salary saved by retirement. For example, if you earn $120,000 a year, you should have at least $960,000 to $1.2 million saved.

These aren’t hard-and-fast rules, but they can help you gauge how much you’ll need to support your ideal retirement lifestyle.

For example, using the 4% rule, you’d need around $600,000 to retire comfortably in Thailand, assuming you can live on $2,000 a month (4% of $600,000 is $24,000 per year). But if you plan to retire in a high-cost city like New York, where $6,000 a month is more realistic, you’d need closer to $1.8 million saved to maintain the same 4% withdrawal rate.

—

### Why It’s Safer To Save More Than the Minimum

Trying to retire on too little can backfire quickly. Here are a few reasons why:

– **You might live longer than expected:** According to the CDC, the average lifespan in the U.S. is 78.4 years. So if you retire at 65, you’ll need to make your savings last for at least another 13 years—or more.

– **Inflation:** Inflation reduces the purchasing power of your savings, which means your money might be worth less as time goes by.

– **Health care isn’t cheap:** According to the Employee Benefit Research Institute, retired couples may need as much as $428,000 in savings to mostly cover medical expenses, depending on their Medicare coverage level. This amount is likely to rise over time.

– **Market downturns can hurt early retirees:** If the first few years of retirement coincide with a recession, your portfolio could take a significant hit.

—

Ultimately, there’s no one-size-fits-all answer to how much you need to retire comfortably. Understanding your personal situation and planning accordingly will help you set a realistic savings goal that supports the retirement lifestyle you want.

—

*The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.*
https://www.nasdaq.com/articles/realistic-minimum-retirement-savings-needed-according-experts