Why Your “Magic Number for Retirement” Could Be Misleading

Have you ever wondered if you have enough saved for retirement? Maybe you’ve heard that you need $1 million, $3 million, or even $5 million to retire comfortably.

Here’s a sobering truth: There is no magic number that guarantees a successful retirement.

What is the Magic Number for Retirement?

A “magic number” for retirement refers to a target amount of savings that people believe will guarantee a successful retirement – commonly cited as $1 million, $3 million, or $5 million.

But there’s a problem with that number – it’s a myth.

The Myth of the Magic Number for Retirement

Remember those magic tricks you wanted to learn as a kid? The ones that promised to amaze your friends but never quite worked out? The “magic retirement number” is a lot like that.

Financial services firms and websites often try to convince you that reaching a specific dollar amount will make you bulletproof in retirement. But they’re using the same kind of sleight of hand as those childhood magic tricks.

Why Your Retirement Savings Goal Isn’t Everything

The truth is, it doesn’t matter if you’ve saved $1 million or $5 million. Without the right strategy, even a substantial nest egg can disappear faster than you’d imagine.

Just look at the statistics: According to MarketWatch, 40% of Americans are at risk of going broke in retirement. And this isn’t just happening to people with modest savings.

The Real Keys to Retirement Planning Success

What really matters isn’t how much you’ve saved – it’s what you do with that money. Let’s look at a real example from our experience at B.O.S.S. Retirement Solutions.

We recently worked with a family who had saved $503,778 in their 401(k). Sounds like a decent amount, right? But without proper planning, they would have paid $685,370 in taxes through their retirement years.

Creating Your Retirement Calculator Strategy

With the right planning strategies, that same family could reduce their tax burden to just $136,020. That’s a difference of $549,350 they could keep in their pocket!

This is just one example of why focusing solely on a target number misses the bigger picture.

Five Essential Components Beyond Your Safe Retirement Amount

Instead of fixating on a magic number, successful retirement planning requires attention to these critical areas:

1. Tax Strategy

Without proper tax planning, your retirement savings could vanish faster than you expect. Here’s a real example:

How would that family that came to B.O.S.S. Retirement Solutions with $503,778 in their 401(k) pay  $685,370 in taxes throughout their retirement on that money and the growth it would achieve? It would be due to:

• Growth that money would have achieved during their retirement years
• Balanced with required minimum distributions
• Taxes on the distributions as they took them
• Estate taxes after death

With proper tax planning, their tax burden dropped to just $136,020 – saving them $549,350 in taxes they could keep for their retirement.

2. Investment Risk Management

Today’s market volatility makes this more critical than ever. Here’s why:

• Recent market swings have been dramatic (remember there was a 1,000-point uptick in a single day in December)
• The “retirement red zone” (5 years before and after retirement) is especially crucial
• Show us someone who lost their shirt in the previous market correction, and we’ll show you someone who didn’t have an updated or diversified 401(k) or IRA

Low volatility investing strategies can help you:

• Avoid major market downturns
• Prevent the need to recover from 50% losses (which require 100% gains to break even)
• Potentially save hundreds of thousands or even millions over your retirement

3. Income Planning

Your retirement success depends on reliable income streams, not just a big savings number. Consider these factors:

• Traditional income sources like dividend-paying stocks aren’t paying what they used to
• Interest rates on CDs and savings accounts remain low in relation to inflation
• Bond yields aren’t providing adequate returns
• We’re living longer than ever before

And optimizing the point where you’ll claim Social Security is crucial. One real example:

• A business owner planned to take Social Security at age 62
• By waiting until his full retirement age of 67
• He gained an additional $211,232 in lifetime benefits
• His total lifetime benefits increased to $1,075,388

4. Inflation Protection

Inflation is “as violent as a mugger,” as Ronald Reagan said. Here are real examples:

• $1.00 in 1950 dollar had the same buying power as $10.23 in 2017
• In 1930, a pound of hamburger cost 12 cents
• By 2013, that same pound cost $4.68
• A retiree spending $5,000 monthly at age 65 will need $10,000 monthly by age 82 just to maintain the same lifestyle

5. Healthcare Planning

Healthcare costs can devastate retirement savings. Here are the numbers:

• A typical 65-year-old couple needs over $400,000 for healthcare costs
• Medicare only covers about 60% of retirement healthcare costs
• People in their 70s spend about $7,566 per person annually on healthcare
• By age 96, that figure more than doubles to $16,145 annually

Long-term care adds even more expense:

• A private room in an assisted living facility costs $97,455 annually
• A semi-private room costs $85,774 annually
• These costs are increasing by 5.5% annually, outpacing general inflation

Each of these components requires careful planning and regular updates. That’s why B.O.S.S. Retirement Solutions created the B.O.S.S. Retirement Blueprint^TM – a comprehensive approach that addresses all these critical areas.

Don’t leave your retirement to chance. If you’ve saved at least $200,000 for retirement, click here now to receive your complimentary forward-looking tax analysis.

Why Professional Retirement Planning Matters

As one of our advisors often says, “Do-it-yourself is good for tile and grout, but it’s probably not good for your retirement plan.”

Successful retirements aren’t built on hope or magic numbers. They’re built on comprehensive strategies tailored to your unique situation.

Take Action for Your Retirement Future

Don’t let the myth of a magic number derail your retirement dreams. Every person’s situation is different, and even minor variations in age, assets, risk tolerance, or longevity can require major strategy adjustments.

That’s why B.O.S.S. Retirement Solutions created our customized B.O.S.S. Retirement Blueprint^TM. We’ll help you understand exactly what strategies could work best for your specific situation.

Your Next Step Toward Retirement Success

If you’ve saved at least $200,000 for retirement, you are qualified to receive our forward-looking tax analysis – a service some advisors charge hundreds or thousands of dollars for – absolutely free.

Click here now or call us now at 800-637-1031 to schedule your complimentary analysis. Remember, retiring successfully doesn’t happen by accident. It starts with the B.O.S.S. Retirement Blueprint^TM.

Don’t wait until it’s too late to create a comprehensive retirement strategy. Click here or call 800-637-1031 today to learn how you could save tens of thousands in taxes and make the most of every dollar you’ve saved for retirement.