This is how much money is needed to ‘retire comfortably’ in California, study says (2024)

FAQs

This is how much money is needed to ‘retire comfortably’ in California, study says? ›

California adults surveyed in the study named a slightly higher “magic” number, believing they will need $1.47 million to retire comfortably.

In a high-cost of living state such as California, you'll need to save more to make it through. Americans think they'll need $1.27 million to live a comfortable retirement, according to the 2023 Planning & Progress Study from life insurance company Northwestern Mutual. That's up from $1.25 million in 2022.

Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.

So, if you're aiming for $100,000 a year in retirement and also receiving Social Security checks, you'd need to have this amount in your portfolio: age 62: $2.1 million. age 67: $1.9 million. age 70: $1.8 million.

A recent analysis determined that a $1 million retirement nest egg may only last about 20 years depending on what state you live in. Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.

Bottom Line. Retiring at 65 seems like a typical target, but it takes careful planning and a sufficient nest egg to pull off. If you accrue $2 million during your career, you can pay yourself $80,000 annually without touching your principal, which translates to a healthy monthly budget.

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more.

According to the Federal Reserve's latest Survey of Consumer Finances, only about 10% of American retirees have managed to save $1 million or more. This leaves a significant 90% who fall short of this milestone.

So, with an initial $800k nest egg, you could potentially withdraw between $40k-60k per year over 20 years before completely depleting your retirement savings. Consulting with an experienced financial advisor can provide tailored advice to assess your retirement needs based on your situation.

Is $300,000 a good retirement amount? ›

With $300,000 planned for your use as a retiree, a retirement age of 50, and an anticipated life expectancy of 85 years, you need that money to last you 35 years. This should mean that your yearly income is around $8,571, and your monthly payment is around $714.

If you're naturally frugal and you plan to live a low-key, minimalist lifestyle in retirement then $150,000 might serve you well. On the other hand, if you'd like to enjoy a more lavish lifestyle or you have a serious health issue that results in high out-of-pocket costs, $150,000 may not go that far at all.

Summary. Retiring with $200,000 in savings will roughly equate to $15,000 annual income across 20 years. If you choose to retire early, you will need additional savings in order to have a comfortable retirement.

The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000.

Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.

It's intended to make sure you have a safe retirement withdrawal rate and don't outlive your savings in your final years. By pulling out only 4% of your total funds and allowing the rest of your investments to continue to grow, you can budget a safe withdrawal rate for 30 years or more.

Is $600k enough? As the table suggests, while $600k is generally sufficient for a comfortable retirement with annual spending up to $40,000, it may fall short if annual expenses exceed this threshold.

It is certainly possible to retire by age 50 with $800,000 in the bank. As the above table shows, $800,000 in savings can last between 20 and 30+ years, depending on how much you spend each year.

Summary. Retiring with $200,000 in savings will roughly equate to $15,000 annual income across 20 years.

With $300,000 planned for your use as a retiree, a retirement age of 50, and an anticipated life expectancy of 85 years, you need that money to last you 35 years. This should mean that your yearly income is around $8,571, and your monthly payment is around $714.