You are probably thinking one of two things. "I don't live a lavish lifestyle, why would I need a million dollars to retire!" or "A million dollars isn't all that much any more, I'm going to need a lot more than that!". No matter which statement you make, we first need to go over the costs of retirement before we can figure out how much you may or may not need for retirement.
There has been a lot of studies that have been performed to figure out the true costs of retirement, but personally, I won't buy into any of them. My nearly 20 years of experience has taught me that retirement expenses are specific to everyone. You might be asking, "then how do I figure that out?". I thought you'd never ask!
Go online to your bank and grab your checkbook. Look over your last 3 to 6 months of cash flow. I want you to see how much money has come into your bank account and how much money has gone out of your bank account. Simple math. Don't look too much into what you bought as it's a slippery slop of worry that you might now account for everything. It's okay, we just want to get an idea of what you are spending each month. Now take the average of the 3 to 6 months as an average of what you are going to need when you retire.
Before we can ask if you need a million dollars to retire, we now need to map out your retirement income. There are a lot of different ways to map our your retirement. However, most of them assume a vital part of your retirement. They assume the average rate of return your investment are going to make over the rest of your life. I believe it's important to project an average, but why assume that rate? The retirement planning methods we use here, don't assume that rate of return, they solve for it.
See the short video below that quickly goes over how to plan out your retirement income and how to solve for a rate of return for your future.
As you can see from the video, solving for a rate of return for retirement can give you a completely different perspective about your future. The new perspective is in stark contrast to everyone needing a million dollars so they can retire. If you can't tell by reading this, I am not a big fan of grouping everyone together and giving blanket advice. You don't need to group yourself with everyone else, you need to step outside of wall streets thinking and figure out for yourself what you need to live the retirement of your dreams!