Hull Financial Planning Personal Finance FAQ Series: How Much Do You Need to Retire at Age 65?

If you plan on retiring at age 65, then you want to have a target number in mind – and it shouldn’t just be a multiple of your current income. What’s the answer?

Take a look at the video below and find out what I think.

How Much Do You Need to Retire at Age 65?

The transcript follows.

The answer to this question is highly dependent on how much your expenses are, how much Social Security you’ll receive, and if you have any other income streams like a pension. There is no magic number, and I don’t particularly care for the notion that you need to have a portion of your income saved up, as, unless you’re on the hedonic treadmill, your expenses and your wages shouldn’t necessarily be correlated.

Therefore, I’d look more at a factor of how much you spend and what a safe withdrawal rate is. Conventional wisdom is that a safe withdrawal rate for a 65 year old is 4%; however, recent research by academics like Dr. Wade Pfau, CFA, points to a lower rate.

There is no magic number or formula to tell you the answer. I’d advise you spend a few hours with an hourly, fee only financial planner who will give you more insight and not try to sell you a bunch of useless products in the meantime.

Related posts:
Get Off Your Hedonic Treadmill
What is a Safe Withdrawal Rate?
Is the Wage Replacement Ratio Incorrectly Calculated?

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Jason Hull was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business. He held a CFP certification from 2015 - 2021. You can read more about him in the About Page. If you live in Johnson County, Texas or the surrounding areas, he and his wife are cash buyers of Johnson County, Texas houses.

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