Retirement income needs vary dramatically by individual circumstances. We'll break down typical budgets for different lifestyles and locations, helping you estimate your personal target number.
Lifestyle Tiers
Basic comfort: $3,000/month (paid-off home, domestic travel). Middle-class: $5,000/month (1-2 international trips/year). Affluent: $8,000+/month (luxury travel, second home). Healthcare averages: $600/month at 65, $1,200 at 80. Location factors: Midwest costs 25% less than coastal cities. The 80% rule: Most need 80% of pre-retirement income - $100,000 salary → $80,000/year target.
Income Sources Mix
Ideal composition: 40% investments (4% withdrawals), 30% Social Security, 20% pensions/rentals, 10% part-time work. Example: $6,000/month = $2,400 from $720,000 portfolio, $1,800 Social Security, $1,200 rental, $600 consulting. Tax efficiency: Draw from taxable accounts first, then tax-deferred, then Roth. Social Security timing: Waiting until 70 increases payments 76% vs taking at 62.
Adjustment Techniques
1) Geographic arbitrage: Moving saves $1,500+/month. 2) Downsizing: $300,000 home equity generates $1,000/month annuity. 3) Healthcare optimization: Medicare Advantage plans save $200/month. 4) Hobbies that pay: $500/month from teaching/selling crafts. 5) Seasonal adjustments: Spend more in active early years, less later.
Key Takeaways
Your 'good' income depends entirely on your definition of a fulfilling retirement. Track actual expenses for 3 months to create a personalized budget. Remember that needs evolve - plan for higher early-retirement leisure spending (age 65-75) followed by increased healthcare costs later (85+). Flexibility is worth more than an extra $100,000 in savings.