It’s one of the first questions people ask us. And honestly, it’s the right one to start with.
The answer is different for everyone. But if you’re living in Mississippi and trying to figure out whether you’re on track, here’s a plain-English way to think through it.
The Number Depends on Your Life, Not a Formula
You’ve probably seen the rule that says you need a million dollars to retire, or that you should plan on replacing 80% of your income. Those are starting points, not answers.
What actually matters is what your retirement looks like. Do you want to travel? Help your kids or grandkids? Stay close to home and keep things simple? The lifestyle you want in retirement drives the number you need, not the other way around.
Mississippi is one of the more affordable states to retire in. Your dollar goes further here than it does in most parts of the country. That’s worth something when you’re doing the math.
Start With What You’ll Spend, Not What You’ve Saved
Most people focus on their account balance first. We think it makes more sense to start with your monthly expenses.
What does your life cost right now? What will it cost when you stop working? Some things go down in retirement. Others, like healthcare and travel, often go up.
Once you know what you need to live on each month, you can work backward to figure out how much your savings needs to generate.
Your Income Sources Change the Target
If you have a pension, Social Security, rental income, or any other guaranteed income coming in, that reduces how much your savings has to do. A person with $3,000 a month in guaranteed income needs their investments to cover a lot less than someone who’s starting from zero.
This is why two people with the same account balance can be in very different situations.
Running Out of Money Is the Real Fear
When we sit down with people for the first time, the question underneath all the other questions is usually this: “Am I going to be okay?”
What they really mean is: “Will I run out of money before I run out of life?”
That’s a reasonable thing to worry about. People are living longer. Healthcare costs more. Markets go up and down. A good retirement plan isn’t just about hitting a number. It’s about building something that holds up over 20 or 30 years no matter what happens.
There’s No Magic Number, But There Is a Right Answer for You
We can’t tell you in a blog post exactly what you need. Nobody can, without knowing your situation.
What we can tell you is that the people who feel most confident heading into retirement aren’t necessarily the ones with the most money. They’re the ones who have a clear picture of where they stand and a plan they understand.
That’s what we help people build.
If you’re trying to figure out whether you’re on track for retirement in Mississippi, we’d be glad to sit down and take a look with you. We’re based in Clinton and we work with folks all over this area who are asking the exact same questions you are.
Give us a call at 601-925-8099 or visit mascagniwealth.com to set up a time to talk.