As retirement approaches, many wonder how much savings they’ll need — especially if they plan to retire at 65 instead of the full retirement age of 67. A common rule of thumb is $1 million, but there’s no one-size-fits-all answer.
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With lifespans often stretching 30 years past retirement, your strategy must be personalized and sustainable. So whether you’re counting down the days or still have a few years to go, this guide will help you navigate the path to financial security.
Understanding Retirement in 2025
Traditionally, financial advisors recommended saving multiples of your salary — three times by age 40, six times by 50, and over eight times by 65. So, someone earning $40,000 to $100,000 annually would need about $340,000 to $850,000 by age 61-64.
However, with the full retirement age now at 67, and economic shifts affecting costs and returns, old rules like the 4% rule — where $1 million yields $40,000 annually — may no longer be sufficient.
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The New Benchmark: $1.5 Million
Today’s experts recommend saving closer to $1.5 million to retire comfortably. Following the 4% rule, this would allow $60,000 per year in retirement income. That extra $20,000 provides a buffer for rising costs, unexpected expenses and a better quality of life.
This figure isn’t arbitrary, either. It reflects rising inflation, changing interest rates and fluctuating job markets. Retirees need more to maintain the same lifestyle previous generations could with less.
Key Factors Impacting Retirement Costs
- Location: Where you live heavily influences your retirement budget. Living costs vary across the U.S., so your savings goal should reflect your local expenses and future financial plans.
- Marital Status: Married couples benefit from dual Social Security checks, and one partner can delay claiming benefits for a higher payout. But after one spouse passes, the survivor only receives the larger check. Fixed expenses remain unchanged, so plan for the loss of income.
- Healthcare, Housing & Lifestyle: Beyond daily living, retirees must budget for healthcare, home upkeep, travel and leisure. Ensuring your nest egg can cover these without financial stress is critical.
How Politics Affects Retirement: The OBBBA
In July 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), impacting retirement and Social Security. Here are some key takeaways:
- It doesn’t eliminate Social Security benefit taxation but adds a temporary senior bonus deduction — $6,000 for single filers or $12,000 for joint filers aged 65+ from 2025-2028.
- Retirees working part-time may deduct up to $25,000 in qualified tip and overtime income (with income limits).
- These deductions could exempt about 90% of retirees from paying income tax on Social Security.
However, critics warn that reduced revenue from these tax breaks could accelerate the depletion of Social Security and Medicare trust funds, potentially bringing insolvency as early as 2032 — earlier than the previously projected 2033.
Final Take To GO: Planning Ahead at Any Age
The bottom line is that there is great importance to proactive financial planning, whether you are just starting your career and savings journey or are approaching retirement. Here are some tips for each.
For Young Investors
Start early. Consider equity-indexed life insurance — it offers market protection, potential growth and life coverage. Paired with a diversified portfolio, it builds a strong retirement base. Early investing benefits from compound interest and lower insurance premiums.
For Those Nearing Retirement
It’s never too late to act. Reevaluate your expenses, cut unnecessary spending and consider working a few extra years. Shift to safer investments and explore part-time work or consulting for supplemental income.
Whatever your age or income level, proactive planning is key. Stay informed, consult experts and align your savings strategy with your long-term goals. With careful preparation, retirement can truly be a time of comfort and fulfillment.
Laura Beck contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: How Much Should You Have Saved To Retire at 65?
