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Merrill Lynch at Bank of America is saying a million dollars is about the minimum anyone needs. If you use their calculator what they don't seem to take into account is the fact you might have income (like a pension) and they don't consider Social security for some odd reason.

They have sufficiently scared me into thinking I can never retire and they will just pull me away from my desk and send me off to the bone yard.


My thinking is that most retirement planning calculators that are sponsored by financial institutions--which is most of them--are going to tell you that you need more money than you probably really do. Partly because they hope you will put more money with them, and maybe partly to cover their behinds so you can't sue them if it turns out to be not enough.

I'm thinking $1M plus a paid off residence would do me fine, and that's without a pension, and living in a high cost area in southern California, and hopefully with some cushion built in so I can cut spending if the market does tank. If I moved to a less expensive area, then I could do with less.

The number that gets thrown around most is a 4% withdrawal rate on your savings. So if you have $1M, that would give you $40,000/year to draw out (though keep in mind that any fees you are paying a financial advisor must come out of the $40K), plus your pension and social security. Is that enough to live on? It's a matter of lifestyle. Certainly there are boatloads of people that get by on less than that. The median household income in the US in 2014 was $54K, and that includes a lot of people raising families and saving for retirement, neither of which expenses I'm assuming you would have in your retirement.

Each year that you work is one less year that you will need to fund in retirement, so my guess is if you are 66, you're probably in good enough shape to retire now--though again it depends on lifestyle, plus comfort level. It doesn't sound like your advisors are encouraging you to feel comfortable with your financial situation yet, which may or may not be for good reason. There is a risk of a substantial market crash, which would hurt. But the more you learn, the more you may be able to find your own comfort level without needing someone else to tell you what it should be.

A very good book on the subject I read recently was How to Make Your Money Last: The Indispensable Retirement Guide by Jane Bryant Quinn. Covers a broad range of topics in understandable language.
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