For decades, the idea of saving $1 million for retirement has been seen as a reliable benchmark. But personal finance expert Ramit Sethi says that figure may fall short for today's retirees. Instead, he argues that both rising costs and lifestyle choices mean Americans should be thinking bigger — and planning differently.
Why $1 Million May Not Cut It
The $1 million retirement target has roots in older financial planning models, but it hasn't kept pace with inflation, longer lifespans, or shifting retirement expectations.
"Get a job at an industrial company and work there for 40 years so that I can retire with $1M in the bank," Sethi told Moneywise, dismissing the advice he once received. "I was like $1 million? That's it?! No, thank you!"
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His concern isn't only about the math. Sethi argues that focusing narrowly on hitting a lump-sum target encourages people to work decades without enjoying their money along the way — only to retire on a tight budget later in life.
The $1.8 Million Benchmark
In his blog, Sethi offers a more detailed calculation. Using the "4% rule," a guideline developed by financial advisor Bill Bengen, he estimates that a couple earning the median U.S. household income of about $70,784 would need roughly $1.8 million to maintain their lifestyle in retirement.
The 4% rule suggests retirees can safely withdraw 4% of their savings annually, adjusted for inflation, without running out of money over a 30-year retirement. At $1.8 million, that provides about $72,000 per year — close to today's median household income.
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Different Rules, Different Results
Financial institutions also provide retirement savings benchmarks. Fidelity, for example, advises saving 10 times your salary by age 67 to sustain your lifestyle in retirement. For someone earning $70,000, that also points to a goal of about $700,000 by mid-career and $1.4 million or more by retirement, depending on spending patterns.
The takeaway? Retirement targets vary widely depending on assumptions about age, lifestyle, and healthcare costs. A frugal retiree with a paid-off home may need much less than someone planning for frequent travel or facing high medical bills.
Beyond the Numbers
Sethi emphasizes that retirement planning isn't just about hitting a number. In his conversations with couples approaching retirement, he often finds that fear and vague goals create more stress than the actual figures. He encourages people to set specific spending priorities — whether that's travel, generosity, or hobbies — and to align their savings strategy accordingly.
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He also underscores the importance of enjoying life along the way. While saving for retirement is essential, Sethi warns that postponing all meaningful experiences until later can lead to regret, especially as retirement ages continue to rise.
Planning Your Path
So, is $1 million enough to retire? For some households, yes — but for many, it may not provide the financial security or lifestyle they hope for. Whether you aim for $1 million, $1.8 million, or more, the key is to create a plan that reflects your expenses, timeline, and vision for retirement.
Even if you're behind on savings, it's not too late to catch up by increasing contributions, reducing spending, or extending your working years. Pairing disciplined saving with intentional spending today may help you live not just a long life — but a rich one.
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