The 201: Wait, HOW much do you need to have saved for retirement?

Happy Friday!

We've become accustomed to hearing the same cookie-cutter advice over and over again: follow the 4% safe withdrawal rule and save 25 times your annual expenses before retiring. While there is value to this advice, how do so many Americans manage to retire when they're nowhere close to having stacked that level of Benjamins? On Wednesday's show, we explored one personal finance writer's counter-argument that the commonly cited one million dollar threshold may not be necessary before pulling the retirement ripcord.

What do you think? Is a cool mil a realistic goal? Is it too high for most people? Is it too little to be able to afford a comfortable retirement? Let's jump in...

-Kevin

The 411

$87,000: Median retirement savings in the United States.
34: Percentage of Americans that feel as though their retirement savings are on track.
61: Percentage of non-retirees who have a tax-sheltered retirement account (401(k), IRA).
21: Percentage of non-retirees who have a defined-benefit pension through an employer.
20: Percentage of non-retirees who have no retirement savings.
$200,000: Median retirement savings for Americans aged 65-74.
$1,907: Mean monthly Social Security benefit for retirees.
$4,345: Average monthly expenses for retirees, according to BLS data.

Ask Joe and OG a question:

If you have a financial question you'd like answered, you'd Better Call Saul...Sehy and OG.

Visit this page and leave us a voicemail.

So how much do you need for retirement: a big or small stack of Benjamins?

In today's headline from USA Today, we see a counter-argument for the much-repeated chorus of how we need to have accumulated 25X our annual expenses to be able to retire. Not so, says the author of this article, basing his stance on anecdotal evidence: you should be good with a much smaller stack than previously thought.

The case for revolution (against burdensome excessive savings)

While we like to pound the drum of saving a substantial stack, making ends meet without a fat investment portfolio is possible.

Get an idea of how much you'll need. To have a target amount to shoot for, it's wise to run some projections to estimate how much you'll need to have accumulated. Run your numbers and get an estimate by using this retirement calculator from NerdWallet (link).
Factor in Social Security benefits. Get an estimate of how much you can expect to receive in monthly income from Social Security by logging into the Social Security benefit estimator (link).
Convert savings into guaranteed lifetime income. While we are not annuity salespeople, there is something to be said about having an additional guaranteed income stream coming in every month. Check out this piece from US News & World Report to learn about the pros and cons of immediate annuities (link). Research how much guaranteed income you can secure by visiting ImmediateAnnuities.com (link).

The case for taxing yourself today to live free tomorrow

Why limit our income in retirement? Land of the Free and Home of the Brave! Manifest Destiny! American Exceptionalism! Baseball and Apple Pie! ~~All for One and One for All!~~ Murika! We are fortunate to have the opportunity to live extraordinary lives before and in retirement.

Get started. If you're a young stacker, time is on your side! Take advantage by investing as much as possible. If you're not so young, there's no time like the present to do what you can. Save and invest as much as possible! Learn how to start investing in 6 steps by reading this piece from Fidelity Investments (link).

Automate it. Learn how to automate your investments by following this step-by-step plan from Motley Fool (link).
Plan your legacy. One big advantage of building a sizable stack is that you may be able to pass on assets to future generations and/or causes that are important to you. Learn how to create an estate plan that includes legacy planning by reading this piece from Kiplinger (link).

Do more with less

The case for "enough." A lot is within your control when it comes to planning for retirement, and one of the big levers you control is how much you spend. Dig deeper into the concept of having "enough" by reading the book Enough: True Measures of Money, Business, and Life - by Vanguard Founder John C. "Jack" Bogle. You can borrow a copy from your local library or support the show by grabbing your copy of the book through our Amazon affiliate link (link).
Small budget? No problem! Learn 7 tips for retiring on a small budget by reading this piece from US News & World Report (link).
Grab your passports. If your retirement portfolio isn't quite as stacked as you'd like it to be to comfortably retire in the US, you may want to consider taking advantage of lower cost-of-living opportunities abroad. Note: this is not a recommendation to move abroad; many challenges come with living in a foreign country. Learn more about how to retire abroad by reading this piece from Kiplinger (link).

Invest in line with your personal circumstances

No two stackers are exactly alike; therefore, you must create your own personal financial plan.

Get started off on the right foot. Learn 15 financial planning tips by reading this piece from Forbes (link).
Make it personal. Learn 12 steps to creating a solid financial plan for yourself by reading this piece from our friend Bola Sokunbi over at Clever Girl Finance (link).
Find the right asset allocation. Learn how to achieve your optimal asset allocation by reading this piece from Investopedia (link).

Don't forget about savings

After you stop working for an income, keeping enough in your cash reserve to see you through extended market downturns is important.

Keep more in cash reserves. Learn how much cash retirees really need, according to financial experts, by reading this piece from CNBC (link).
Earn more on your cash reserves. Visit our sponsor, DepositAccounts.com, to find the best-paying savings accounts nationwide so you can move your money where it's treated best (link).

Extra income streams

Just because you stop your 9-5 corporate gig doesn't mean you have to stop earning income completely.

Start a business. Learn 13 retirement business ideas by reading this piece from LegalZoom (link).

Do what's in your best interests

Focus on #1. Avoid comparing yourself to others while you're on your financial journey. Check out this piece from Entrepreneur to learn 10 tips to stay focused on your financial goals (link).

Mom's Takeaway

You do you. Listen, your retirement and your level of spending are up to you. Just be sure you have enough retirement income so you won't be trying to move back into my basement when you're old and grey!

How'd You Like To Be a Part of the Podcast?

Want to be a part of the show? Record yourself on your phone or other device and send the .mp3 file to joe@stackingbenjamins.com:

"This is ______ from _______. When I’m not __________, I’m Stacking Benjamins."

AVAILABLE NOW!!! 📒 STACKED: Your Super Serious Guide to Modern Money Management. 👉 Order your copy!

These guides are free, but they aren't cheap! If you know someone who should check out the show or this guide, pass it along to a friend! If you're new to the Stacker family, welcome! Subscribe to the podcast for more, read our new blog, or go crazy with dad jokes and money talk in Joe's mom's basement-based Facebook group.

That's it! Enjoy the show!

Kevin & Joe

PS: Never miss our podcast! Check out all of our past episodes below.