Oct 20, 2026

7 Expert Tips for Figuring Out Your Retirement Number

Keep these essential tips in mind when it's time to calculate your number.

Americans believe that they need $1.46 million to retire comfortably, a figure that’s $200,000 higher than last year, according to a survey released by Northwestern Mutual.

With 46% of Americans admitting that they don’t expect to be financially prepared for retirement, you must run the numbers early on so that you can figure out how much you should strive to save for your golden years.

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We gathered tips from experts to help people figure out their retirement number so that they can plan accordingly.

1. Stop Using Arbitrary Numbers

Evan H. Farr, a certified elder law attorney and retirement planner at Farr Law Firm, P.C., believes that most people enter into retirement planning backward.

“People typically begin by selecting an arbitrary savings target, and then they go about trying to figure out where they will get that from, instead of beginning with their projected spending and guaranteed income," he said.

2. Have a Clear Understanding of How Much You Need

Jordan Masciorini, certified retirement counselor and senior wealth advisor at Ticino Wealth, noted that a retirement financial plan is a clear understanding of how much money you can live on in retirement, which he refers to as the "retirement paycheck."

“You then want to set guardrails, meaning that if your cumulative account balance hits an upper guardrail, then you can increase your income in retirement, or if you hit a lower guardrail, you have to decrease your income in retirement," he added.

3. Determine Your Income Gap

The best way to plan your retirement is to determine your income gap, not just the size of the account balance you will need, per Farr. He wants you to shift your perspective from wondering how much money you need to how much your monthly income will be and how much of it is already guaranteed. This means you want to factor in your Social Security and pension so you can run accurate calculations of what you need each month to cover your expenses.

4. Calculate Your Guaranteed Income

Farr acknowledged that guaranteed income sources, such as Social Security and pension payments, greatly affect the amount of savings a retiree will need.

“For example, a married couple who each have good pension income and two strong Social Security checks may require a significantly smaller amount of invested retirement savings compared to another couple who rely solely upon withdrawing from a portfolio," he said.

They attorney used the example that if a household projects they will have expenses of $9,000 monthly in retirement, and their Social Security and pension incomes will be covering $6,500 of that, then they only need to ensure their investment portfolio provides them a reliable source of approximately $2,500 a month to replace the deficit.

5. Consider the 4% Rule

Farr believes that the "4% rule" is still useful as a general guideline, but that it shouldn’t be treated as an absolute.

This article, shared by Charles Schwab, notes that if you have $1 million saved, you can withdraw $40,000 in your first year of retirement, give yourself an additional 2.5% the next year, and not have to worry about running out of money for the next 30 years. You can use this rule to determine your retirement number based on your projected expenses for the next 30 years.

6. Expect To Spend the Most at the Start of Retirement

Masciorini noted that retirees will likely spend more money in the first ten years of retirement because they’re still relatively young and may want to travel and explore. He added, “In your 80's, you may want to slow down, and the idea of traveling is less intriguing.”

Farr also warned that retirement spending won’t be steady over 30 years because your expenses may fluctuate in stages based on your health. This means you’ll want an accurate retirement number that accounts for your overall health.

Farr emphasized that delaying Social Security benefits also amounts to buying more inflation-adjusted lifetime income. He stressed that pension income is a form of longevity insurance because retirees won’t be forced to sell investments in order to cover living expenses.

Farr concluded, “The ultimate goal is not merely maximizing the value of one's account balances. Rather, the goal is to provide sufficient income flow over time so that retirees maintain financial independence for whatever length of time their actual retirement lasts.”

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

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Written by

Martin Dasko

Martin Dasko is a personal finance writer, a mortgage broker, and a lifelong student of building a better life. With 18 years of experience helping people make smarter financial decisions, Martin writes about money, real estate, side hustles, and creating a better life. His work has been featured in major publications including the Toronto Star, Financial Post, and New York Times. Through his writing, he explores how people can build wealth, take control of their finances, and design a life that goes beyond simply chasing a paycheck. When he’s not writing about money, Martin is usually training Brazilian jiu-jitsu, playing soccer, lifting weights, or experimenting with ways to stay healthy without sacrificing the things that make life enjoyable.

Edited by

Zuri Anderson

Zuri is an editor with over 8 years of digital content and news experience. When she's not managing her freelance writers, voraciously editing copy and coming up with engaging stories, she's catching up on her favorite shows, books, movies and video games.