No, you do not really need $1.26 million to retire

Every few months, there’s a new story or study or think piece on the exact dollar amount needed to afford retirement. The most recent is Northwestern Mutual’s 2025 Planning & Progress Study, which found that Americans believe they need $1.26 million to retire comfortably.

Unfortunately, many people give up on the very idea of saving for retirement when they hear $1.26 million is the price tag for a comfortable (not lavish) retirement. Aiming for a seven-figure nest egg can feel out of reach for many of us—which may explain why Northwestern Mutual also found that 51% of Americans expect to outlive their money.

But the reality of retirement is far more nuanced than studies like this make it seem. Not only is there no “magic number” that will ensure a well-funded and fulfilling retirement, but you also have a great deal of agency over your financial decisions now and in retirement.

Here’s what you need to know about planning your retirement if you’re worried that your portfolio will never measure up to the target number du jour.

$1.26 million is meaningless

There’s a reason why the Northwestern Mutual study—and others like it—choose to name a specific dollar figure as a retirement goal: it’s eye-catching. Every person who reads the study or scrolls past the headline will have a visceral and emotional reaction to that dollar amount.

But even though $1.26 million is a very specific amount of money, it’s also meaningless. For some people, $1.26 million is an astronomical sum. For others, it will barely cover the first five years of retirement. And both groups of people can create a fulfilling retirement, even though their nest egg isn’t in the same zip code.

How much you really need to retire

Instead of focusing on the specific target amount listed in studies like these, it’s better to aim for a goal based on your personal financial situation. One common rule of thumb is to aim for a nest egg equal to 10x your final salary. This offers a more personalized metric to shoot for.

For example, Oliver earns $55,000 per year and is aiming for a nest egg of at least $550,000. But Cynthia, who earns $300,000 per year, has a goal of $3 million. A goal of $1.26 million could be inappropriate for both of them for different reasons—it’s too high for Oliver and too low for Cynthia.

Your retirement needs are personal and idiosyncratic and can’t be summed up with a specific dollar amount. So you can feel free to ignore those numbers and focus on goals based on your financial situation.

The importance of flexibility

We often think of retirement planning as set in stone. You might ask yourself if you need $1.26 million to retire, assuming the answer is either yes or no. Similarly, the question of whether you can afford to retire at age 65 feels like it should have either a yes or no answer.

But retirement decisions are not nearly so cut-and-dried. Any retirement plan you make should include flexibility that allows you to make changes as circumstances change. That starts with crunching the numbers to figure out your retirement budget based on what you have, rather than an arbitrary target number. You can make changes to your plans, spending, or savings based on the real data.

This works for your planned retirement date, as well. If you’re thinking about retiring at age 65, go ahead and plan for it—but make contingency plans if something changes and your anticipated retirement date is no longer an option.

Get the retirement you want—for less

Embracing this kind of plan flexibility can even help with your big retirement dreams. Maybe you have a vision in your mind of retiring to a sun-soaked Greek isle—and somehow ensuring that Colin Firth shows up.

But if you don’t have the money to make your Mamma Mia! retirement dreams a reality, you don’t have to give up on Kalokairi entirely. You can include more affordable versions of your dream into your retirement planning—such as spending a month singing along to “Dancing Queen” on white beaches—so that you have options once you’re ready to retire.

Retire on your terms

There’s no shortage of financial reporting that will make you feel like you’re doing it all wrong, especially when it comes to retirement. While putting more money aside for retirement is never a bad idea (seriously—transfer some money to your 401(k) right now!), you can let go of any anxiety you feel when your nest egg can’t compete with the currently touted retirement target.

An easy way to calculate your retirement goal is to multiply your salary by 10, which gives you a target that fits your specific situation and needs. And no matter the size of your nest egg, build flexibility into your retirement plan for everything from timing to fulfilling your dreams. This will allow you to make your retirement work even if your circumstances change.