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How to Save $4 million for Retirement

How to Save $4 million for Retirement

April 20, 2022

Before we get into HOW you might be able to save $4 million by the time you retire, let’s back up and determine this:

Do you NEED to save $4 million for retirement?

The amount of money needed for retirement is different for everyone. For example, some people have pensions, which means they have a guaranteed income source when they retire. This most likely means that you won’t personally need to save as much for retirement to replace your pre-retirement income.  (Unfortunately, pensions are quickly becoming a thing of the past.  The younger you are, the greater the chances that you don’t have a pension.)

As with all financial planning, it’s most important to determine what the right plan is for YOU.

When we work with a client, we take a top-down approach to planning. Here are a few things we look at:

  • How much are you spending today?
  • Are there expenses that you will be reducing in retirement (such as those related to your children)?
  • Will you be carrying a mortgage? 
  • Do you want to travel in retirement?

We also take a look at medical expenses, purchasing a vehicle every so often, and where you will be living. And last but certainly not least, we look at tax strategies. 


What if you want to save $4 million for retirement?

When you hear a big number like $4 million, it can be intimidating.  It also depends on your starting point – the younger you start the better.  Your investment return is also important in calculating number.  Here are a couple examples:

Age 30 retiring at 65 with 8% return would need to save $1,743 per month.

Age 30 retiring at 65 with 4% return would need to save $4,378 per month.

If you waited just ten years…

Age 40 retiring at 65 with 8% return would need to save $4,206 per month.


Don’t panic.

If this seems unattainable, start with what you can today and increase your contribution every time you get a pay increase or come into some unexpected money.

Remember that financial planning is a unique journey for everyone; you might not need that $4 million. This is why it’s important to discuss your future and your options with an impartial third party who can help you make the right decisions.