Meet David and Alicia

David (58) and Alicia (51) live in Fort Collins, Colorado—a scenic, mid-sized city known for its outdoor lifestyle and excellent public schools. They have an 8-year-old daughter, Emma, who loves camping, piano lessons, and science kits.

David had planned to work until 61, but an unexpected corporate downsizing changed everything. At 58, he finds himself retired earlier than planned, with no desire to re-enter the job market.

Now, they’re asking the big question:

How much money do we need right now to retire comfortably—while still raising a child?

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Their Retirement Goals

• Desired Retirement Age: Now (David at 58, Alicia at 51)
• Annual Spending Target: $105,000 (includes Emma’s upbringing, travel, healthcare, and future college support)
• Retirement Horizon: 35+ years
• Healthcare (Pre-Medicare): $24,000/year for the family
• Social Security (Starting at 67):
  • David: $3,400/month (~$41,000/year)
  • Alicia (spousal benefit): ~$20,000/year
  • Combined SS: ~$61,000/year
• College Goal for Emma: $100,000

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Step-by-Step: How Much Do They Need to Retire?

1. Retirement Phase 1: Age 58 to 67

Full 9 years with no Social Security—expenses must come entirely from savings.

• $105,000/year × 9 years = $945,000 in withdrawals
• But with investment growth (say 4% real return), they’ll need about $850,000–$900,000 today to cover this phase

✅ Target Needed by Age 58 for Phase 1: ~$900,000

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2. Retirement Phase 2: Age 67 and Beyond

Social Security covers $61,000/year, but their budget is $105,000/year. That leaves:

• Annual Gap: $105,000 – $61,000 = $44,000
• Over a 25-year horizon (age 67 to 92), they’ll need:
  $44,000 × 25 = $1.1 million, adjusted for inflation and investment return

✅ Target Needed by Age 67 for Phase 2: ~$1.1 million

But since we’re calculating how much they need now at age 58, we’ll discount that amount back to today using a 4% real return over 9 years:

• Present value of $1.1M in 9 years ≈ $800,000

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3. College Fund for Emma

They want to contribute $100,000 by the time Emma starts college at age 18 (in 10 years).

Assuming they invest $6,000/year for 10 years at 5% return, they’ll reach about $75,000.

So they’ll want to set aside another $25,000 now to ensure they hit that goal.

✅ College Target Today: $25,000

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✅ Final Answer: How Much Do They Need at Age 58?

Purpose	Amount Needed
Pre-Social Security Gap	$900,000
Retirement Years (67–92)	$800,000
College Fund Top-Off	$25,000
Total Retirement Target	$1.725 million

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Round Up for Cushion and Inflation Drift

To add margin for:

• Healthcare inflation
• Market volatility
• Emergencies or long-term care
• Home maintenance or vehicle replacements

Add a 15% buffer:

➡️ $1.725M × 1.15 = $1.98 million

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David and Alicia’s Retirement Number: $2.0 Million

That’s the amount they need today to walk away confidently—with no pension, no new income, and a child still at home.

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How Do They Get There?

If they’re close—say, at $1.6M right now, they could:

1. Work part-time for 2–3 years to delay withdrawals and grow savings
2. Reduce spending temporarily to stretch cash flow
3. Use Roth conversions while in low tax brackets pre-Social Security
4. Delay claiming Social Security to age 70, increasing guaranteed income and shrinking the gap they need to cover

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A Peek into Their New Reality

These days, David walks Emma to school, helps her with homework, and coaches her softball team. Alicia, energized by the flexibility, is looking into part-time community projects. They’re living simply, but not frugally—spending with intention, not anxiety.

Retirement at 58 wasn’t their original plan—but with a clear number and a confident strategy, it’s turning out better than expected.

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Wondering what your retirement number is? Don’t guess—build your plan, stress-test it, and retire with confidence.

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