How to Figure Out How Much You Need for a Secure Retirement

“What If I Never Have Enough to Retire?”

It’s one of the most common financial fears I hear about: Not having enough money to retire comfortably and being forced to work for their whole lives.

With 59% of people afraid Social Security won’t be around for them and 64% fearing they’ll outlive their savings, the issue feels overwhelming. On top of that, the median estimated retirement savings in the US (including people with no savings) is $87,000… and that means a lot of people may probably face financial struggles.

So many people face this same fear. And part of that comes from not knowing how to answer a very important question: “How much money do I need to save for a secure retirement?”

That’s because the answer varies from person to person and situation to situation.

While you can’t predict stock market returns, medical issues, inflation, and other variables you might face, there are things you can do to give yourself a better chance of having enough money, so you can fully retire whenever you’re ready.

Remember, there are two sides to this equation, and you can change things on both of them. Building up savings and adding income streams increases the money coming in. Making strategic spending changes decreases the money going out. And if you really don’t have enough to retire but you can’t work anymore, there are places you can turn for support when you need it.

Managing the Shortfall

When it comes to retirement savings, you may be less behind than you think. Many people look at their expected expenses and figure out their savings won’t last long. But savings don’t have to cover that whole expense⎯just what’s left after Social Security and other income sources.

Instead of feeling overwhelmed by the “big picture,” focus on what you need to cover the cash flow gap. It’s a little less daunting and much more manageable. While you can, you want to put together as much as possible to generate some future cash flow. Every cent you save or invest now covers that much more of your expenses later.

No Matter Your Age, Keep Saving

What if you’re 60 or 65 or even 70 and you’re short on savings? Focus on saving what you can, no matter how small or pointless it may seem because it will begin to add up and keep growing over time. Every dime you stash away will make your future life that much easier. There’s no age limit on making contributions to retirement accounts if you have earned income (from employment). Plus, those contributions can give you a tax break now, making the savings a little less painful for your budget.

Once you hit age 50, you can start taking advantage of catch-up contributions that let you put extra money into tax-advantaged retirement accounts every year. And even if you can’t contribute the full amount, it still makes sense to contribute something.

Develop Income Streams to Increase Cash Flow

One of the best retirement-friendly strategies is to create as many separate income streams as you can, minimizing your reliance on any one of them. This could include anything from investments to affiliate sales to side gigs to boost the sources of money flowing into your household. Putting in the work and building up income streams before retirement helps ensure you won’t need to keep trading your time for money once you’re ready to stop working.

As you get closer to your desired retirement age, you can start shifting investments toward income production: interest and dividends. Those can add to your cash flow without the need to sell off investments, giving them more time to grow.

Woman holding a bushel of apples. Secure retirement

Revisit Your Expenses

You’ll see a lot of advice online and on social media about cutting expenses in retirement, but they’re not always realistic. The most common advice is to move to a lower-cost-of-living area. Not everyone can do that, and not everyone wants to. But if your expenses are outweighing your resources and you can’t increase your resources, expenses are the only thing left to change. And if you’re doing that, you’ll want to hit the biggest unwanted drains on your money.

Consider getting rid of expenses that don’t serve your life before you stop working, while you still have more financial flexibility. The biggest one of these will be interest expense on your debt, but you may have other expenses that don’t add value to your life.

Aggressively Downsize Debt

Paying off as much debt as possible before retirement gives you three big financial benefits:

Less cash going out every month
No more interest expense
More potential resources if you start running short

Any debt that you can pay off, have forgiven (which may be possible with certain loans), or at least significantly pay down frees up more cash in your monthly budget. Getting rid of debt or refinancing it to a lower interest rate reduces your overall interest, saving you tons of money. Finally, the less debt you have, the easier it will be to borrow if you need to. For example, by paying down your credit cards, you restore your borrowing ability without having to apply for any new loans.

Take Advantage of Special Senior Tax Breaks

Many states offer tax credits to senior citizens. Some offer special or expanded property tax credits or rebates, reducing the cost of staying in your home. Thirteen states, including Pennsylvania and Mississippi, don’t tax retirement income such as Social Security benefits or 401(k) distributions.

On the federal front, senior Americans get a higher standard deduction: an extra $1,950 for single taxpayers or $1,550 for married taxpayers (filing either jointly or separately). Plus, low-income adults at least sixty-five years old may qualify for the special Credit for the Elderly or the Disabled tax credit (see IRS Publication 524 at www.irs.gov) that could reduce your tax bill by up to $7,500 depending on your specific circumstances.

Know Your Resources

Unfortunately, more than 17 million American seniors struggle financially. About 1 in 3 Americans over age 65 live on less than 200% of the Federal Poverty Line, around $30,120 per year for a single person. Experts expect that number will only go up in the future.

It’s scary to think about this, but it’s critical to plan for. And your plan should include knowing where to turn if you need help.

Where to Start

If you don’t know what benefits exist, which you might be eligible for, or where to look, start at the top. A few organizations specialize in directing people toward appropriate benefits. Those include:

Any of these are solid launch points to aim your search for benefits in the right direction.

SSI: Supplemental Security Income

If you’re getting Social Security retirement benefits and still need financial support to make ends meet, you may qualify for Supplemental Security Income (SSI). It can increase monthly Social Security payments for adults over age 65 with limited income and resources, and that’s all you need to qualify. While the amount you get depends on your family size and where you live, the maximum monthly SSI payment is $967 for single people and $1,450 for married couples (for 2025). It’s not a windfall, but it can help make your budget more manageable.

Food, Housing, and Home Energy Assistance

Seniors have expanded options when it comes to getting assistance for necessities including food, housing, home energy, and transportation. Many of these are federal programs administered by states. Right now, some of these programs may be facing cuts. But as things stand, they’re still available to help you get by.

The available benefits and their amounts differ depending on where you live. These resources are worth looking into if you’re having difficulty covering essential expenses:

Your home state may offer additional resources beyond federally funded programs. For example, Maryland offers free and low-cost transportation services to senior citizens through its Senior Rides program. New Jersey runs a program called NJSave that helps low-income seniors save money on a variety of living expenses. Indiana offers the SILVER (Seniors in Indiana Low-income and Vulnerable Energy Resource) program to help with energy costs.

Check your state website to find out what support is available in your area.

More Ways to Figure Out How Much You Need for a Secure Retirement

As I said earlier in this post, this answer can vary from person to person and situation to situation. The thing to remember is that, regardless of what “experts” say, you want to design your retirement to fit your needs and the life you want to live.

The decisions you make will affect how much money you should have for retirement, as well as how long you may want to work. You may also decide you want to keep working part time or have a second career after you retire. Really, this is up to you.

Planning for retirement and figuring out what you want your retirement to look like are both key to having that life you want.

I show you ways to save for retirement, regardless of your age, as well as ways to stretch out your savings, and more in my revised edition of Retirement 101 (v2).

I lay out everything from determining when you can afford to retire to the latest trends in retirement, as well as how to manage tricky situations like divorce or avoiding scams.

Click on the button below to find out more about the book and get your copy now.

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The Right Way to Figure Out How Much You Need for a Secure Retirement