Do You Really Need 10X Your Salary Saved by Retirement, or Is That Just a Myth?

Core Insights - Many individuals struggle to save for retirement due to high living expenses, leaving little for IRA or 401(k) contributions [1][2] - Without adequate retirement savings, individuals may rely solely on Social Security, which typically replaces only about 40% of an average paycheck [2] Retirement Savings Guidelines - Fidelity suggests saving 10 times one's final salary for a comfortable retirement; for example, a $120,000 salary would require $1.2 million in savings [4][6] - The necessity of saving 10 times one's salary depends on personal retirement goals and expected living costs [4] Expense Considerations - It is common for living costs to decrease in retirement, especially if major expenses like a mortgage are eliminated, although healthcare costs may rise [4] - A general guideline is to plan for needing 80% of pre-retirement income to maintain a comfortable lifestyle [5] Social Security and Savings Needs - For a $120,000 salary, Social Security benefits would provide approximately $36,000 annually, necessitating additional savings to cover the remaining expenses [5][7] - To withdraw $60,000 annually from savings at a 4% withdrawal rate, a total of $1.5 million in savings would be required [7]