• Schwab survey of 401(k) participants said they needed $1.7M.

• ‘The people we surveyed have a realistic target for retirement, but many likely aren’t on track to get where they want to go’, According to Steve Anderson, President, Schwab Retirement Planning Services.

• Your magic number can be very different from others based on your lifestyle.

• To understand when you can afford to retire and how much you need to save, financial planning software can be used to model your situation.

How much do you need to retire? Schwab asked this question of 1,000 401(k) participants. The detailed release can be found here.

According to the Schwab release, ‘Schwab has determined that if you start in your 20’s, you will likely be able to retire comfortably by investing 10 to 15 percent of your salary each year. But if you don’t start until age 45 or older, you might need to invest as much as 35 percent of your salary annually, which would be a significant challenge for most workers.’

Is the $1.7 M figure realistic? What is your magic number? If you have a financial plan, you have the number. Because each person or family’s situation is different, there is no single number. Based on financial plans I have developed, the number can range by 2x or even more, based on goals. Are you saving to retire early? What type of lifestyle do you want in retirement? Do you have goals for gifts to children or your favorite charities? These are all critical question.

A financial planner can model your actual retirement needs based on your goals and current investments. Use the plan to determine your magic number and/or any changes you may need to make to your savings plan and investment portfolio.