The new "magic number" for retirement in California: $1.47 million?

[Auggie]

Americans’ “magic number” for retirement savings is at an all-time high — $1.46 million to retire comfortably, according to responses from Northwestern Mutual’s 2024 Planning & Progress Study.

SNIP

California adults surveyed in the study named a slightly higher “magic” number, believing they will need $1.47 million to retire comfortably. But that may seem a smaller than expected difference given the state’s notoriously high cost of living.

SNIP

While the Northwestern Mutual study’s magic number is based on what people say they need, other studies have looked at retirement costs and financial planning guidance to come up with a data-based magic number, or at least a “magic” formula.

A recent LendingTree study found that a person would need more than $1 million to retire with an “average” lifestyle in just over one-third of U.S. metros. The study looked at estimated annual retirement costs, and applied the “4% rule” (which says spending in your first year of retirement should equal 4% of your savings) to come up with how much someone would need in each U.S. metropolitan area to retire.

More (paywall): https://www.sfchronicle.com/california/article/magic-number-retirement-19393925.php

Highlights (from the link):

• Different findings in reports ($1 million versus $1.46 million) may point to the fact that people have a hard time judging what they will need and spend in retirement (and overestimate for it)

• A LendingTree study found it would take an average of $1.37 million to retire in San Francisco -- almost 40% higher than the national average ... and the largest amount among all U.S. metro areas.

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More is better, IMO. There's no way to guess where social security and medicare benefits will be headed should repukes ever gain control of government. Heck, SCOTUS could invent some way to dismantle everything tomorrow.

[Abnredleg]

1. No debt is crucial

Our house is paid for and our cars are relatively new so we don’t have much in the way of costs. You don’t want to be retiring with a mortgage.

[jimfields33]

2. Definitely right about the mortgage.

My bills have gone up a thousand a month without a mortgage. Homeowners and automobile insurance being the worst. Add the insane prices of food and electricity, it’s definitely worthwhile paying off the mortgage before retirement. Save save and save even if it hurts. The future is totally up to each individual and how they handed their finances.

[Auggie]

3. Recommended

[quaint]

4. That was my retirement plan.

A few glitches, primarily due to really bad eyesight necessitating having everything delivered, plus, as noted, higher and higher homeowners and earthquake insurance.

However, not everyone has the opportunity to purchase a home, and I would have great difficulty surviving if I was 75 and had to pay rent. Rent would have no doubt eaten my IRA by this point.

[NBachers]

5. Still working full-time at 75, I should be able to retire in another 300 years.