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  • Writer's pictureNathan Stoll

How Much Money Do I Need to Retire?

Your needs in retirement are based on how much your anticipated living expenses will be. This can vary significantly based on several factors. Some examples include whether or not you have finished paying off your home mortgage, the amount of travel you have planned, and the costs associated with the activities or entertainment you will enjoy in retirement.

As a “rule of thumb” (according to, income during retirement “should aim to replace 70% to 90% of your annual pre-retirement income through savings and Social Security. For example, a retiree who earns an average of $63,000 per year before retirement should expect to need $44,000 to $57,000 per year in retirement.” Obviously, some of the costs associated with employment will diminish in retirement – i.e., those associated with commuting, lunches, clothing, etc.

Use a Retirement Income Calculator

The website cited above,, provides a calculator to help determine your income needs based on your personal situation.

There are usually several sources of income in retirement. Some of the most common sources are Social Security, pensions, annuities, 401(k), savings, and part-time employment.

How much are my Social Security benefits?

Here is a helpful guide from the Social Security Administration that discusses the following topics:

  1. Where to find your Social Security benefits

  2. How much Social Security benefits to expect based on the age they begin – and the benefit of delaying filing for benefits

  3. The effect outside income has on receiving benefits

  4. Children and spousal benefits

  5. Taxes owed on benefits received

Additional Social Security resources:

You may want to consider “rolling” your 401(k), 403(b) or 457 plan into an IRA or a Roth IRA. If you follow the IRS guidelines, there will likely be no tax on this “rollover”. The IRA or Roth IRA will give you control over how your money is invested. If you can afford to defer making withdrawals, all of the money in the account can have a chance to grow until it is needed at a later date.

If you need to use the funds from a 401(k), 403(b) or 457 plan for supplemental income, you will need to determine a realistic rate of return on the invested money. This needs to assume that the stock market will rise and fall during your retirement years. Inflation and taxes will also need to be factored in as you determine the expected returns from your holdings.

Available part-time jobs

Finally, it is important to consider Medicare benefits (or private health insurance) for you and your spouse, your health and that of your spouse, and your interest in part-time employment. Part-time jobs are useful as supplemental income and are helpful as a cushion so that you can help needy family members. Work also keeps a person active and involved in an activity outside the home, and might involve charity work, which may or may not include being paid a salary. Here are some helpful websites related to part-time employment in retirement.

A key issue in retirement is the assurance that you have enough income to sustain yourself, regardless of how long you live and as your health needs change in later years, while hopefully enjoying those years with your family and loved ones.

Ben Reppond is CEO and Investment Manager of Reppond Investments. Reppond Investments, Inc. is a registered investment adviser in the States of Washington and Montana. We may not transact business in state where we are not appropriately registered, excluded or exempted from registration. Individual responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation will not be made without registration or exemption.

Investment Advisory Services offered through Reppond Investments, Inc.

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