How much money do you need to comfortably retire? $1 million? $2 million? More? The answer isn’t one-size-fits-all—it depends on your lifestyle, expenses, and income sources.

Financial planners generally recommend replacing about 80% of your pre-retirement income to maintain the same standard of living. That means if you earn $100,000 per year, you should aim for at least $80,000 per year in retirement income. But here’s the catch—not all of this income needs to come from savings alone.

A well-planned retirement strategy includes multiple income streams, such as Social Security, pensions, and investments. One powerful option to consider is Compound Real Estate Bonds (CREB), which offers a fixed 8.5% APY—providing stable, passive income without the volatility of traditional stock market investments.

In this guide, we’ll break down how to calculate your retirement number and explore how CREB can help you achieve financial security and stress-free retirement income.

How Much Income Do You Need to Retire?

One of the biggest questions when planning for retirement is determining how much income you will need to maintain your lifestyle. While some may assume they need to replace their full pre-retirement income, the reality is that many expenses decrease or disappear altogether after retirement.

For instance, once you retire, you will no longer need to save for retirement, eliminating a significant financial burden. Work-related costs such as commuting, professional attire, and daily expenses like lunches out may also decline. Additionally, if you have been diligent about paying off your mortgage, housing costs could be significantly lower or even eliminated. Life insurance may also become unnecessary if you no longer have dependents relying on your income.

That said, the widely accepted rule of thumb suggests replacing about 80% of your pre-retirement income to maintain the same standard of living. However, this percentage is not a one-size-fits-all solution. Your retirement lifestyle, travel plans, healthcare needs, and housing situation can all impact the amount of income you will actually require.

For those who plan to travel extensively or pursue expensive hobbies, aiming to replace 90% to 100% of pre-retirement income may be a more realistic target. On the other hand, if you have significantly reduced expenses—perhaps by downsizing your home or eliminating debt—you may find that living on less than 80% is entirely feasible.

Consider a couple with a combined annual income of $120,000. If they follow the 80% rule, they will need approximately $96,000 per year in retirement income, which equates to $8,000 per month. This amount can come from various sources, including Social Security, pensions, investments, and passive income streams like Compound Real Estate Bonds (CREB), which provide fixed, predictable returns of 8.5% APY.

Ultimately, determining the right retirement income depends on personal circumstances and financial goals. A strategic approach that includes stable investments, diversified income sources, and a well-structured withdrawal plan can ensure financial security throughout retirement.

Social Security, Pensions, and Other Reliable Income Sources

A key advantage in retirement planning is that your savings won’t be your only source of income. Most retirees receive some financial support from Social Security benefits, which serve as a significant income stream for many. However, the portion of your pre-retirement income that Social Security replaces varies based on your lifetime earnings.

For lower to middle-income retirees, Social Security can cover a considerable percentage of their financial needs. For instance, estimates from Fidelity suggest that someone earning $50,000 annually can expect Social Security to replace about 35% of their income. In contrast, a higher-income earner making $300,000 per year would see a much lower replacement rate—around 11%—meaning they must rely more heavily on personal savings and investments.

If you are unsure about how much Social Security income you will receive, checking your latest Social Security statement or creating a my Social Security account can provide a more accurate estimate based on your work history.

Beyond Social Security, pensions from previous employers can contribute to retirement income. While pensions are becoming less common in the private sector, those who have them should factor in their expected payouts. Other permanent and predictable income sources—such as annuities that begin disbursing after retirement or reverse mortgages that provide cash flow from home equity—can further supplement your financial plan.

How Much Savings Will You Need to Retire?

Once you determine how much income you’ll need from your savings, the next step is calculating the size of your retirement nest egg to generate that income sustainably.

One common strategy is the 4% rule, which suggests that retirees can withdraw 4% of their total savings in the first year of retirement and adjust that amount annually for inflation. This rule is designed to make your savings last at least 30 years under typical market conditions.

For example, let’s say a retiree needs $60,000 per year from their savings to cover living expenses. Using the 4% rule, they would need a retirement nest egg of:

$60,0000.04=$1.5 million\frac{\$60,000}{0.04} = \$1.5 \text{ million}0.04$60,000​=$1.5 million

This means they should aim to accumulate at least $1.5 million in retirement accounts such as 401(k)s, IRAs, or diversified investment portfolios to generate their required annual income.

However, the 4% rule isn’t foolproof. It assumes a balanced portfolio of stocks and bonds, but market fluctuations can impact returns. In a bull market, retirees may feel comfortable withdrawing more than 4%, while in a downturn, they might need to withdraw less to prevent depleting their savings too quickly.

For example, as of mid-2024, the NASDAQ had surged over 20% year-to-date, but history shows that corrections can happen at any time. A significant market drop could force retirees to sell investments at a loss if they rely solely on stocks for income.

This is why having diversified income sources is critical. Instead of depending entirely on stocks and bonds, retirees can incorporate low-risk, high-yield investments like Compound Real Estate Bonds (CREB), which offer a fixed 8.5% APY. Unlike the volatility of the stock market, CREB provides steady, passive income while preserving capital.

By blending stable investments like CREB with traditional retirement accounts, retirees can protect their portfolios from market downturns and ensure long-term financial security. Whether aiming for $1 million, $1.5 million, or more, diversifying with alternative investments can make retirement savings more reliable and stress-free.

Conclusion: Securing Your Retirement with a Smart Strategy

Planning for retirement isn’t just about hitting a specific savings goal—it’s about ensuring financial stability and a comfortable lifestyle that lasts throughout your golden years. While traditional methods like Social Security, pensions, and 401(k)s play a role, they may not be enough on their own. That’s why diversification is key.

Relying solely on the stock market can leave you vulnerable to economic downturns, while traditional bonds and savings accounts may not generate enough income to keep up with inflation. By incorporating low-risk, high-yield investments like Compound Real Estate Bonds (CREB) into your portfolio, you can create a reliable passive income stream that ensures financial security without market volatility.

CREB’s fixed 8.5% APY provides a predictable return, making it a strong alternative to stocks and traditional fixed-income investments. Whether your retirement goal is $1 million, $1.5 million, or more, including stable, income-generating assets like CREB can help safeguard your future and provide the financial freedom you deserve.

The best time to start planning for retirement is now. Take control of your future by building a diversified investment strategy that balances security, growth, and passive income—so you can retire with confidence and peace of mind.