You’ve likely seen all kinds of information related to the above telling you that you will never have enough. A common calculation is that you need a million dollars so at 8% you will generate $80,000 per year and combined with social security you “might” just scrape by.

Rather than take an approach which suggests simply piling up all the cash that you can, it is often more productive to take a look at your expected expenses assuming no debt and no kids. It is often a surprise to folks how little they actually “need” in retirement with those factors eliminated.

Thus, your very first goal should be to enter retirement entirely debt free (the exception to this would be income producing properties where someone else is actually paying the debt). Many people spend their working years with more than 50% of their income going towards debt (mortgage, cars, credit cards, student loans, etc.). If that were eliminated from the equation suddenly you are in an entirely different financial situation.

Thus, while most financial planners say you need 80% of your income in retirement, the actual number may be FAR less if you can eliminate all debt. Actual income needed in retirement is generally much lower (around 50% in some studies).

That’s a rather big revelation. For a working couple making 100K per year, if you will only need 50k in retirement, combined social security (at full retirement) may cover the bulk of that load and the amount you need to supplement that income in retirement becomes far more realistic.

Most retirement scenarios out there are designed to scare people whereas taking a realistic look at your retirement can provide you some comfort if you feel that you are a little behind in saving for it.