Somewhere along the way, “$1 million” became the universal goal for retirement. It sounds simple — hit seven figures and you’re free. But in reality, that number means nothing without context. For one person, a million might be more than enough. For another, it may fall short.

At My Wealth Life, we teach that your financial plan should be built on personal purpose, not public averages. You don’t need to chase someone else’s dream — you need to define your own Wealth Target.

Why Averages Mislead More Than They Motivate

We’ve all seen those charts comparing the “average savings by age.” The problem? They tell you nothing about your actual readiness for retirement. A few wealthy households can skew national averages upward, giving the illusion that everyone is doing better than they really are. Meanwhile, the median saver — the one in the middle — often has far less.

The truth: your money needs to serve your life, not the average of someone else’s. That’s why focusing on your own needs, location, and lifestyle is the only way to plan a meaningful future.

The 3-Step Wealth Target Method

So, how do you figure out your Wealth Target — the amount you personally need to live the retirement you envision? Here’s the step-by-step method we use with our coaching clients to replace guesswork with clarity.

Step 1: Define Your Lifestyle and Annual Spending

Start by identifying what your retirement life looks like — not someone else’s. Will you travel, volunteer, or simply enjoy quiet routines? Write down what that lifestyle costs per year.

As a starting point, review your current spending using our Zero-Based Budget Template. Then adjust for the changes retirement will bring:

• Expenses that decrease: no more commuting, work attire, or retirement contributions.
• Expenses that increase: healthcare, leisure activities, and travel.

Be realistic, not rigid. The goal here is awareness — understanding what it will actually cost to live your version of freedom.

Step 2: Subtract Guaranteed Income

Next, determine how much income will automatically flow in — Social Security, pensions, annuities, or rental income. These are your “guaranteed” dollars that reduce how much your savings must provide.

If you’ve never checked your Social Security estimate, visit SSA.gov to view your projected benefits. Subtract this total from your expected annual expenses to find your income gap.

That gap is what your investments and savings will need to fill — the cornerstone of your Wealth Target.

Step 3: Calculate Your Wealth Target

To estimate how much you’ll need invested to cover that gap, use a conservative withdrawal rate — typically around 4%. Divide your annual gap by 0.04 to get your target savings goal.

This is your Wealth Target — the number that reflects your lifestyle, your income, and your future. It’s your personal benchmark for financial independence.

Three Retirements, Three Different Realities

Let’s see how this plays out in real life:

• Larry & Susan have $2.1M saved but live in a high-cost city. Their luxury lifestyle and housing costs create a shortfall — they’ll need to adjust to maintain their freedom.
• Marvin & Jessica has $300K saved but a solid military pension, social security and modest lifestyle. Their guaranteed income covers nearly everything — they’re financially free without millions.
• Michael has less than $200K but lives debt-free in a low-cost area. His Social Security alone meets his needs — his savings are backup, not necessity.

The takeaway: your retirement readiness isn’t defined by how much you have — it’s defined by how well your resources align with your life.

How to Improve Your Wealth Target

If your current savings fall short, don’t panic — small moves can create huge results over time. Here are four ways to strengthen your plan:

• Work a little longer. Two extra years of earning and saving can add thousands in guaranteed income.
• Lower your expenses. Downsizing or relocating to a lower-cost area can reduce your target dramatically.
• Delay Social Security. Waiting until full retirement age increases lifetime benefits.
• Save more now. An extra $200 per month over 10–15 years can grow into six figures of additional wealth.

Every step you take now shrinks the gap between where you are and your Wealth Target — and increases your peace of mind later.

Your Wealth, Your Plan

Retirement shouldn’t be based on averages or arbitrary goals. It should be rooted in self-awareness and strategy. When you know your Wealth Target, you can stop chasing headlines and start building the life you actually want.

Ready to create your plan? Begin with our Zero-Based Budget Template, explore the Beginner Investment Series, and work through the 7 Baby Steps Wealth Series to bring clarity and structure to your financial journey.