You Don’t Need $1.8 Million to Retire Comfortably

Here’s the truth: you may not need anywhere near that much to retire well.

We talk to clients every day who are anxious about retirement—many of them worried they’ll need $1.8 million or more just to live comfortably. That number comes from a recent Charles Schwab study that made major headlines. And while it grabbed attention, it also created unnecessary fear. Let’s walk through what’s really going on—and why a lesser-known strategy could help you retire with confidence, even with less savings than you thought necessary.

Where Did the $1.8 Million Figure Come From?

Most likely, it’s based on outdated and rigid rules of thumb, specifically the 4%–5% withdrawal rule. This rule says you can safely withdraw 4% of your portfolio each year to make your money last 30 years. But that rule doesn’t reflect how most people actually live—or how retirement markets behave. And when it’s applied broadly, it often leads people to believe they have to save millions to retire at all. Instead of a one-size-fits-all formula, we believe in custom strategies that work with your lifestyle, spending patterns, and existing income sources.

Why the 4% Rule Falls Short

We’ve run the numbers and compared outcomes. Here’s what we’ve found:

• If you retire during a market downturn, like in 2008, the 4% rule can cause you to run out of money early.
• It doesn’t factor in Social Security, pensions, or other income.
• It assumes you carry all the risk, not institutions.
• And it leads many retirees to underspend out of fear—even clients with $5 million portfolios often live on just 2% to 4% of their assets.

An Alternative: Hybrid Pensions with Guaranteed Payouts

Instead of basing your retirement plan on unpredictable market returns, we often recommend clients consider hybrid pensions—a strategy that combines protection, growth, and income.

These plans offer:

• Guaranteed contractual payouts of 10% to 20% for life
• Cash value growth (so your money isn’t “locked up”)
• Protection from market losses
• Potential for legacy planning or Roth conversions

And unlike traditional pensions, you control the timing. You can start income now or defer to significantly increase your payout.

Let’s Talk Numbers

Here’s a real-world example based on actual client scenarios:

Let’s say you want $100,000/year in retirement income. If you expect $20,000 to $40,000 from Social Security, you’ll need to fill a gap of $60,000 to $80,000/year.

• Using a 10% guaranteed payout, you’d only need $600,000 to $800,000 in a hybrid pension to generate that income.
• Defer longer and reach a 15% payout, and now you only need $400,000 to $533,000 to fill the same income gap.

That’s a far cry from $1.8 million—and it’s all based on real, contractual math, not speculation.

So Why Haven’t You Heard of This Before?

Frankly, many financial institutions make more money managing large portfolios. If you think you need to hit $1.8 million, you’re more likely to chase growth—and that means more assets for them to manage. But our mission isn’t to generate fear. It’s to help clients retire with clarity, dignity, and confidence. That means showing you every available tool, not just the ones that benefit Wall Street.

Planning Beyond the Numbers

Hybrid pensions don’t just change your math—they change your lifestyle:

• Enjoy first-class travel or dream vacations
• Create a living legacy by gifting or helping family now
• Fund long-term care naturally without relying solely on insurance
• Eat better, live longer, and preserve your independence

Studies show retirees with guaranteed income and strong social ties live longer, happier lives and pensions play a key role.

What We Can Do Together

We’ve helped clients retire earlier, live better, and worry less—all by using strategic hybrid pension planning. Our proprietary “staging and lading” approach layers income sources and maximizes guaranteed payouts over time.

If you’re curious how a hybrid pension might fit into your plan, let’s start with a simple conversation. We’ll walk through:

• Your current assets and income sources
• Your ideal retirement lifestyle
• Strategies to capture 10%–20% guaranteed payouts for life
• Tax efficiency and long-term planning

Final Thoughts

Don’t let an arbitrary headline dictate your retirement goals. Whether you have $400,000 or $4 million, what matters is how it’s structured. If you’d like to explore how hybrid pensions or other guaranteed income solutions could support your retirement, we’re here to help. Let’s build a retirement that’s not just possible—but exceptional.