Long form How to Calculate If You Actually Have Enough to Retire - The Real Number Most People Have
LEGACY INVESTMENT SERVICES
YouTube Long Form Script | June 2025 | Week 1 - Long Form A
VIDEO TITLE: How to Calculate If You Actually Have Enough to Retire - The Real Number Most People Have Never Seen
ADVISOR: Jordan Cassiani
TARGET RUNTIME: 14-16 minutes
FORMAT: On-camera advisor, screen share for calculations/visuals
CTA: Link in bio for complimentary retirement income analysis
Securities and advisory services offered through Osaic Wealth, Inc., member FINRA/SIPC. Legacy Investment Services and Osaic Wealth are separate entities. Content is for educational purposes only. Not investment, tax, or legal advice. All scenarios are hypothetical illustrations. Investing involves risk including possible loss of principal.
The number on your investment statement is not your retirement number. That is one of the most common and most expensive confusions I see, and it happens to people who are otherwise very smart about money. They have been working for 30 years, they have a balance that looks impressive, and they assume that because it is large, it is enough. Sometimes it is. Sometimes it is not even close. The difference comes down to one question: how much income can this money actually produce every single month for the rest of your life, after taxes, and how confident are you that it will not run out before you do.
I'm Jordan Cassiani with Legacy Investment Services. This video is going to walk you through the full calculation. We are going to go step by step so that by the end of this you can run your own version of this with your actual numbers. And I will show you the spots where most people make mistakes, because there are a few of them that are not obvious until someone points them out.
Let's start by reframing the whole question. Most people measure retirement readiness by their balance. What I want you to think about instead is income. Specifically, the gap between what your life costs every month and what is already coming in from guaranteed sources. That gap is the only number your portfolio actually needs to cover. Everything else is noise.
Step One: Find Your Real Monthly Spending
This sounds like the easy part. It is not. When I ask clients what they spend per month, I almost always get a number that is 20 to 30 percent lower than what they actually spend. Not because they are lying, but because people remember the big categories and forget everything else. They remember the mortgage or the rent. They remember groceries. They forget the subscriptions, the car maintenance, the quarterly insurance bills, the gifts, the travel, the random Costco run that turned into $400.
So step one is non-negotiable: pull the last 12 months of bank statements and credit card statements and add up everything. Get the real number. For most people I work with, the real monthly spend lands somewhere between $6,500 and $10,000 depending on lifestyle, location, and whether there is still a mortgage in the picture. There are people below that and people well above it, but that range covers a lot of the people watching this video.
Let's use $8,000 a month as our working example throughout this video. That is $96,000 per year. Keep that number in mind.
Step Two: Map Your Guaranteed Income Sources
Guaranteed income means income that does not depend on your portfolio performing well. Social Security is the big one for most people. If you have a pension, that goes here too. Some people have rental income or a part-time business. Whatever it is, list it out and add it up.
For our hypothetical person, let's say they have Social Security coming in at $2,800 a month. That is it. No pension. So their guaranteed income covers $2,800 of the $8,000 monthly need.
That leaves a gap of $5,200 per month, which is $62,400 per year. That $62,400 is the number their portfolio needs to produce. Not $96,000. Just $62,400. This is a really important distinction, because the portfolio target you are building toward is based on that gap number, not your total spending.
Step Three: Calculate the Portfolio Target From the Gap
Here is where most people have never actually done the math. To figure out how much you need saved to sustainably generate $62,400 per year, you use a withdrawal rate. The 4% rule is the most commonly referenced starting point. It comes from research by financial planner William Bengen in the 1990s, where he found that a retiree who withdrew 4% of their portfolio in year one and adjusted for inflation each year had a very high probability of making it 30 years across most historical market scenarios.
If we apply 4% to our gap of $62,400, we divide $62,400 by 0.04 and we get $1.56 million. That is the portfolio target for this specific person. And I want to emphasize that word specific, because run slightly different numbers and the answer changes dramatically.
If this person had delayed Social Security and was receiving $3,400 a month instead of $2,800, the gap shrinks to $4,600 a month. Run that through the same math and the portfolio target drops to $1.38 million. That is a $180,000 difference just from the Social Security timing decision, which is why we spend so much time on that one choice.
On the other side, if their Social Security was only $2,000 a month, the gap is $6,000 per month, and the portfolio target climbs to $1.8 million. Same lifestyle. Same spending. Different portfolio requirement, just because of one income source changing.
Step Four: The Tax Haircut Most People Completely Skip
This is the mistake that quietly costs people the most money, and almost nobody accounts for it when they do this calculation on their own.
If your $1.56 million target is sitting entirely in a traditional IRA or 401(k), that money has never been taxed. Every dollar you pull out in retirement is ordinary income to the IRS. At a 22% effective federal tax rate, your $62,400 gross withdrawal does not produce $62,400 of spending money. It produces roughly $48,700 after federal taxes. So to actually net $62,400 of spendable income, you need to pull out closer to $80,000 gross.
Now go back to the portfolio math. Divide $80,000 by 0.04 and your true portfolio target is $2 million. Not $1.56 million. The tax treatment of your accounts just added $440,000 to the finish line, and that is without even accounting for state taxes, which some of you are paying on top of that.
A Roth IRA changes this calculation completely. If that $1.56 million target is in a Roth IRA, every dollar you withdraw is tax-free. Your $62,400 gap is covered by $62,400 in withdrawals. No gross-up needed. The Roth target and the traditional IRA target for the same retirement look completely different on paper, which is why the account type matters as much as the account balance.
This is also why Roth conversions in the years before retirement can have such a significant impact on the actual retirement you can sustain. Converting pre-tax money to Roth now, even at a tax cost, can lower the gross withdrawal requirement in retirement for decades.
Step Five: The Inflation Factor Over 25 to 30 Years
Here is the part that feels abstract but is completely real. If you retire at 62 and live to 87, you have a 25-year retirement. At an average inflation rate of 2.5% per year, the $8,000 per month you need today becomes roughly $14,800 per month in 25 years just to maintain the same standard of living. Your groceries cost more. Your healthcare costs more. Everything costs more, and most fixed income sources do not keep up.
Social Security does have a cost-of-living adjustment built in, which is one of its most underappreciated features. But a fixed pension does not, and a portfolio that is heavily weighted toward cash or very conservative investments may not grow fast enough to keep up with inflation across a 25-year timeline.
This is why I push back when clients in their early 60s tell me they want to move everything to bonds and cash. I understand the instinct. It feels safe. But if your portfolio does not grow faster than you are spending it over 25 years, you will run out. The risk of being too conservative is real, it just moves slowly enough that most people do not recognize it until it is too late to correct.
How to Know if You Are Actually On Track
Here is the practical summary. Take your real monthly spending number. Subtract every dollar of guaranteed monthly income. That is your monthly gap. Multiply by 12 to get your annual gap. Divide by 0.04 to get your base portfolio target. Then add roughly 25 to 30 percent to that number if most of your savings are in pre-tax accounts, to account for the tax gross-up.
Compare that adjusted target to what you actually have. If you are at or above it, you are probably in good shape. If there is a gap, the earlier you know that, the more options you have. You can work a few more years. You can reduce your expected spending in retirement. You can do more aggressive Roth conversion work in the years before you stop working. You can optimize Social Security timing. All of those levers are available to you right now that close up the moment you retire without addressing them.
What most people do is not run this calculation at all. They retire, they start spending, and then somewhere around year three or four they realize the trajectory is not what they expected. At that point, your options are much narrower.
The Call to Action
If you want to run this calculation with your actual numbers, your actual Social Security projection, your actual account types, and your actual spending, that is exactly what we do in a complimentary retirement income analysis. We build this out for you, model it across different scenarios including down markets and inflation spikes, and show you exactly where you stand and what, if anything, needs to change.
The link to book that is in my bio. It is complimentary, no obligation, and you will leave with a real answer instead of a guess. Subscribe if you want this kind of content every week. I'm Jordan Cassiani with Legacy Investment Services. I will see you in the next one.
PRODUCTION NOTES
Open standing or leaning forward, straight into the first line. No welcome, no intro music under speech. Screen share for the gap calculation in steps three and four, show the actual math on screen as you say the numbers. Thumbnail concept: Jordan on camera, bold text showing the formula 'GAP / 0.04 = YOUR NUMBER' on a bright background. Mid-video CTA goes between Step Four and Step Five. Title options for SEO: 'How Much Do You Need to Retire? (The Calculation Most People Skip)' or 'Retirement Readiness Calculator: Here Is the Real Math'.
Legacy Investment Services | Jordan Cassiani | Week 1 Long Form A - How to Calculate Your Retirement Number