How Much Money Is Really Enough To Retire On?

Q: How much money is really enough to retire on, and what kind of investment returns do you need to get there?

A: Investors just want their number. The idea there’s a magic number, a dollar amount, to strive for so you can retire in carefree bliss is appealing to many.

Unfortunately, the answer isn’t that simple. Some like to say $1 million is enough to retire on. But while that might be more than enough for most people, it may be far too little for many others.

The fact is there are dozens of highly unique variables that go into figuring out how much money you need to retire. Those variables span from where you live, to how much you spend, whether you have a pension or other retirement savings and how old you will be when you retire. That’s not to mention life expectancy and looming financial obligations, such as needing to care for relatives with special needs.

The wide array of variables that go into retirement planning are the big reason why you probably can’t find a one-size fits all number. That’s where online retirement calculators come in. Most brokerages provide online tools that help you figure out how much you’ll need to retire given your details. But even these calculators rarely agree, as they use different methods to come up with findings.

The best advice is to use several online retirement calculators and compile the results. Run your numbers through several calculators and try to get a good rough idea based on all the results you get.

By running the numbers over several times you should be able to triangulate a good number to shoot for given your particular situation.

But stop looking for a one-size fits all number you should save. You won’t find one, at least not one you’d want to rely on.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at twitter.com/mattkrantz.