How Much Will I Need for Retirement?

How much money do I need to retire?

You need enough reliable income and accessible savings to support the life you expect to lead, with room for taxes, healthcare, inflation, and surprises. The starting point is your household's spending, not someone else's account balance. Compare that spending with Social Security, pensions, and other income, then evaluate how your savings could cover the difference over time. The answer depends on when you retire, how long retirement lasts, and how much flexibility you have.

Retirement is a financial transition, but it is also a question of purpose. Time with family, meaningful work, service, and generosity belong in the conversation alongside the numbers. A useful plan connects the resources you have with the responsibilities and opportunities ahead.

Start with what your retirement will cost

Look at a full year of household spending. Separate recurring needs from choices you could adjust. Then consider what changes when work ends: commuting may decline, while travel, medical expenses, or support for family may increase. Include irregular expenses such as home repairs and vehicle replacements rather than treating every quiet month as typical.

Keep taxes and charitable giving visible in the estimate. A desired amount of spendable income is different from the amount you may need to withdraw from an account. Your mix of taxable accounts, retirement accounts, and Roth accounts affects that calculation.

Know which income arrives, and when

Gather pension estimates and review your Social Security record. Your own retirement benefit depends partly on your claiming age; family and survivor benefits have different rules. Use the Social Security Administration's planning tools to compare your estimates before choosing a date.

Map the timing as well as the amount. Someone who stops working before claiming Social Security needs a way to fund the intervening years. A couple may also need to understand how household income changes after the first spouse dies.

Test the plan under less comfortable conditions

A single average return cannot describe every retirement. Consider lower investment returns early in retirement, higher living costs, a longer life, and an unexpected expense. Ask which adjustments would be manageable: working longer, saving more, changing discretionary spending, or revisiting a major purchase.

The purpose is to understand your options before you need them. A percentage withdrawal rule can start a discussion, but it cannot promise that a particular household's savings will last. Your investments, taxes, spending pattern, and willingness to adapt all matter.

What should I do during the five years before retirement?

• Build a realistic spending estimate, including taxes, giving, healthcare, and occasional large expenses.
• Gather current account balances, pension options, Social Security estimates, and debt details.
• Decide how you would cover the years between leaving work and starting other income sources.
• Review health coverage before age 65 and the Medicare enrollment rules that apply to your situation.
• Discuss withdrawals and possible Roth conversions with your financial planner and tax professional before acting.
• Review investment risk, cash needs, beneficiary designations, and estate-planning priorities.
• Agree on what would prompt a change to the plan and when you will review it together.

Bring the decisions together

A retirement plan should explain how the pieces work together and what to do next. For a household in Waxhaw, that may mean coordinating the retirement date with a spouse's coverage, evaluating a pension choice, or deciding how generosity fits into a changing income picture.

Shepherd offers both focused and ongoing financial planning. You can review our planning fees and request a conversation about the questions you want to work through.