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Cracking the Retirement Code: How Much Do You Need to Retire

For past generations, retirement was generally a simple concept for them.   Most people worked for many years at the same company, retired around the age of 65, and then received income from their pension and Social Security.

Today, our changing society has created just about the opposite experience.   The options and opportunities for “retirement” today is countless.  The number of decisions and responsibilities that go into retirement planning can easily be considered overwhelming.  People's vision of retirement today is unique to them… People are figuring out what is fulfilling to them and purposefully making retirement plans towards that, which is great.

However, in this changing society of today, people are experiencing better health which has led to longer lifespans… so it's not unrealistic to think you could spend over a quarter of your life in retirement.  Especially if that is coupled with the much-desired early retirement.  BUT therein lies the dilemma, with these longer retirement years, how do you not outlive your money?

So in today’s blog, I want to get into how I think about and how I answer the question “how much do I need to retire?”

 If somebody asked me “Ryan, how much do I need to retire?” I could answer them in very simple way by saying “you need 70% of whatever your income is the year before you retire every year”.

 I could also answer that in a very complex manner and say, well… if you estimate your annual retirement expenses, add in the effects of inflation on your assets, as well as add in the effects of market timing on withdrawals, especially in down markets and BOOM you have your retirement need number.

 Both answers have legs in the retirement planning world…… but before I go further, I want to see if you caught something I just did.  Did you notice in both of those examples I was answering the question in terms of “income in retirement” not a “nest egg” number.  I think when I get asked that question people are looking for me to say you need at least $5MM to retire!  No.  to figure out the answer to the question of “how much do you need to retire”…you have to back into that number through understanding your income need.  Let me say that again…

 If I were to say $5MM that would essentially be putting the cart ahead of the horse.

 Okay so let’s unpack this concept of understanding your income need in retirement some more.  And I want to do that by sharing with you how I believe you should think about income in your retirement years.  

 Go-go, slow-go, no-go  

  I like to think about someone’s retirement in 3 ~10 year stages.  You’ll first have your Go-Go years…then your Slow-Go years, and then your No-Go years.


The go-go years of retirement are what most of us think retirement should be.  Think of these years between the ages of 65-75.  You are still very healthy.  You are taking a lot of vacations, the picture of you and your sig other on a beach with lots of sun, you are traveling to see kids and grandkids, you are dining out with friends, you are following your passions. You name it.   

 This is awesome and I get pumped up even talking about it!  I’d be golfing every day playing hockey every night.  Family kids would be in there too!

 But because this time is spent on these fun activities and lifestyle that comes with a higher cost.   And in these go-go years you will find yourself spending more money per year than you ever have.  


The slow-go years are usually between the ages of 75-85.  This stage still involves a very active lifestyle but usually all the costlier vacations / trips have been taken.  Hobbies are slowing down as well.  If it was me maybe I’m playing golf 3x a week instead of 7x a week b/c my knees are hurting. 

 At this stage, you are focusing on lower expenses to make up for the higher expenses from the previous stage.   


The no-go years usually go from age 85 and on.  This stage of life simply is slower because of age and health.  Travel and major social activities aren’t really happening…kids grandkids are traveling to you and in my case maybe golf has gone down to 1x a week if at all.

 So it’s safe to say, in this stage of life the expenses have dropped considerably.  Side note I am not talking about healthcare expenses…that is a conversation for another day.  That takes its own planning for in retirement. 


 Okay, now that you understand how to envision your retirement in lifestyle stages…you can start to do some homework on how much those stages are going to cost you.  You then can plan to allocate funds based on these stages.  And once you do that you will be able to answer the question of “how much you need to retire”.  There’s definitely an art to this part which I plan to cover in later episodes but hopefully after today’s episode you have a clearer path to your retirement goals than you did prior to listening!  And so I’ll leave you with that…until next time … be well. 

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