I don’t know about you, but every time I see headlines that say, “Top 10 Reasons” or “How Much Do You Need,” I click on it.
So when I saw the CNBC article, “You’ll need at least $1 million to retire comfortably in these 10 U.S. States,” I couldn’t help myself.
There were no surprises on the list. California, New York, and Hawaii held three of the top four spots. What I was looking for were details. For example, did the survey consider Social Security? Did it look at all assets, such as your home, or only investable assets? How long was “retirement” for the calculation? Unfortunately, not too many details were provided.
As it turned out, the article was based on the 2024 Planning and Progress study by Northwestern Mutual. The study found that U.S. adults believe they will need $1.46 million (see table) to retire comfortably, which was a 15% increase from 2023. What’s more stunning is that the “magic number” has jumped 53% from the $951,000 in 2020.
It’s entertaining information but not helpful when creating a retirement strategy. The amount needed for retirement will differ for each person or household based on their desired standard of living throughout retirement and level of expenses. Factors such as healthcare costs, lifestyle choices, housing, and travel plans can significantly impact the total amount required. It's essential to consider all these variables to ensure a comprehensive and personalized retirement plan.