George Kamel - The Magic Number Needed to Retire Comfortably?

Episode Date: August 8, 2025

💸 Learn to invest in what matters most. Check out our free investing and retirement resources.   How much do you actually need to retire? In this episode, find out what the experts say is themagic number and how to plan today for the retirement of your dreams.   Next Steps:  • 🎥 Watch my video Investing for Beginners. • 💰 Plan for your retirement dreams with the Retirement Calculator. • 📖 Read more about the State of Personal Finance in America. • 📈 Are you on track with the Baby Steps? Get a free personalized plan.   • 💵 Start your free budget today. Download the EveryDollar app!   Connect With Our Sponsors:  • Get up to 40% off Cozy Earth with code GEORGE.  • Get 20% off when you join DeleteMe.  • Learn more about opening a high-yield savings account with Laurel Road.    Explore More From Ramsey Network:  🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💡 The Rachel Cruze Show  🪑 Front Row Seat with Ken Coleman  📈 EntreLeadership    Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

What's the magic number you need to retire comfortably? Well, thanks to a brand new study, we may have the answer. And in today's video, we're going to see what number the researchers came up with and how they came up with it. And we'll see if they may be onto something, and you'll definitely learn how to prepare for your dream retirement. And I hope it is also magic. Wow! All right, according to the research we're looking at today, the magic number four retirement is, drum roll please. Fine, I'll do it myself.

$1.26 million. And this study comes from North Northwestern Mutual. And if that name sounds familiar, it's probably because some dude you went to college with tried to sell you one of their whole life insurance policies. Hopefully you said no, don't take drugs, don't take whole life policies from bros. But their data is helpful, so I'm willing to look past my beef with them for this video. So how did they come up with this figure? Well, it's not a number that they actually calculated. It's what Americans said they think they'll need. You see, the study surveyed over 4,500 Americans and asked them how much money they expect they'll

need to retire comfortably. Basically, they conducted a national vibe check for retirement. And the average answer, $1.26 million. And whether you think that's too much, not enough, just right, I'm going to at least show you what it looks like to get there using our retirement calculator. And if you want to use your own numbers, I'll leave a link in the description for you to check it out. All right, here we go. Let's start with, let's say your bright-eyed, bushytailed, 25-year-old who avoid is due loan debt. Let's start there. And I don't know what retirement age we're going to go with. Let's say 65. That's reasonable. So we're starting from zero.

Let's say they're going to contribute, I don't know, $200 a month, 10% return. I legit. Guys, I'm not kidding. I did not know. I was going to end up with exactly 1.26 numbers by plugging those numbers in. I promise you, the team did not prepare me. That was just a wild hunch.

Am I a gene? Do I need to take one of those tests to see if I'm a genius? No. Rude. It was a rhetorical question. I was not looking for a substantiated answer. I did one of those IQ test games, but I think it was a malware virus.

So, thanks, Facebook. But really, that's impressive. So $200 a month from 25 to 65 gets you to that magical retirement number where you can retire comfortably. Now, we don't know what life's going to look like when this person's 65, what inflation will do,

what their lifestyle is, what their expenses are, but at least we know that's how to get there for 25. $200 a month. Very reasonable for the average person, especially if they're debt-free. Now, we're going to have to increase this as we get older because we have less time and compound growth on our side. So let's say you're 30. How much more would you need to invest to get there?

Let's bump it to 350. 1.3. So we can actually do a little less than 350 bucks from age 30 to 65 to get to that number. Let's bump it to 35. My guess is we have to do closer to 500 bucks a month to get there. And I was pretty close. Let's bump it to 550. Bada bing, bada, boom.

559. Ding, ding. pretty good at using calculators. One of my greatest skills. I'm kind of a big deal. So $5.59 a month from $35 to $65 to $65 is what you need to invest to get to that $1.26 million. Now let's get scarier.

You're $40 with $0 saved in retirement. How much would you need to save to get to that number? I'm going to say $900 bucks. Close. $9.50? I mean, second try? Pretty good. All right, let's bump it to $45.

I'm going to say, now you're going to need $1,200 a month to achieve the same number. Nope, way more. Wow. 1,300. Nope, we're going to have to go 1,600. Yeah, that's getting there. 1660 is a lock.

Wow. So you can see, we went from having to invest like 200 bucks a month from 25, but if we're 45 and just getting started, we need to invest 1660 a month to achieve that same result by the same age. Okay, let's bump it up to 55. This one's going to get scary. Buckle up. I'm going to say $2,500 a month.

Not even close. That is wild. Okay, 35. a month, not even close, $6,000 a month. Now we're getting closer. That is unreasonable for most people. Starting from zero, at age 55 to 65, you need to invest about $6,100 a month to achieve that magic retirement number. Now, realistically, if you are 55 with nothing saved, you probably need to work longer than 65, so I'm going to bump this up to 70 to give us a more realistic picture and then bump my investment number down to 4,000. Well, I can invest way less.

All right, the longer we work, the easier this gets, that's math. All right, so about a little over $3,000 a month from age 55 to 70 to get to that 1.26 million number. So I hope that helps give you guys a picture of what it looks like to get there and the fact that it's very achievable, especially if you're younger with time on your side. Now notice, you don't need to invest a million dollars to wind up with a million dollars.

If we go back to that 25-year-old, check this out. This is wild. 25 to 65, I think I said 200. Look at this. contributions, $96,000. The compound growth, $1.168 million. This 25-year-old didn't even put in 100 grand into this pile that turned into 1.26 million. So I hope that encourages you that you don't need to make a million dollars, you don't even need to save a million dollars, you just need to invest consistently over a long period of time. Now, even though that $1.26 million nest egg

is definitely possible for most people, you still may be shocked to see Americans aiming that high based on where we're actually at. After all, we are talking about that gets excited whenever the McRib comes back. It's like an STD. You shouldn't be that excited about it coming back, guys. You should be seeing a doctor as soon as possible. Ooh, I wish you hadn't said that. But while this might be surprising, it's also encouraging.

You see, at least 48% of workers have never even stopped to calculate how much money they'll need in retirement. So it's good news that more people are waking up to the reality that you can't just coast into retirement and expect things to magically work out. You have to find out what your number is, aim for it, and then invest consistently to get it. there. Plus, the study features a list of Americans' top burning questions about retirement, and that's encouraging too. Those questions include, will I have enough to retire? Will Social Security be there when I qualify for it? What if inflation rises when I'm retired? Will I outlive my savings? And when will I be old enough to start clapping when Plainsland? The last one wasn't in there, but the answer is never. I don't want to hear it. Sit in silence

until it's your turn to exit your row. Don't stand up, don't clap, shut your mouth and sit out. flight attendant, I would crush it. In all seriousness, I'm glad people are asking these questions, because you shouldn't count on Social Security. Inflation is totally real, and outliving your savings is a nightmare that happens to people all the time. So the good news is they're asking the right questions. The bad news is, even though Americans are aiming to have over a million bucks in retirement, most folks will never get there for two reasons. Reason number one, people are behind on retirement savings. In our most recent Ramsey State of Personal Finance study, we found that 53% of millennials have more debt than retirement savings. And one in three people expect to work

past retirement age, not because they want to, but because they'll have to. And when you're that far behind on a retirement, saving up $1.26 million becomes a mountain that feels way too high to climb. And in the case of this mountain, it is about how fast you'll get there and what's waiting for you on the other side. Don't sing it. Do not start singing it. Let me do that. It's the climb. That was brutal. Don't ever do that again. Here's the problem. Most people are out here treating retirement like it's some far-off mirage.

And then they hit the panic button when they're 60 and decide, I'd like to retire now and they can't. So you can't coast your way into retirement. You have to aim for it. And that means living on less than you make now, avoiding debt like it's a group text from your HOA, and consistently putting money into investments that actually grow over time. And the average American simply isn't doing that.

And the second reason that's the second reason that most Americans won't hit that 1.26 million target is because not only are they behind on retirement savings, they're not doing enough to catch up. Even though half of Americans are worried about outliving their savings in retirement, only 35% of them are actually doing something to address it. Knowing you're not prepared and choosing to do nothing is financial self-sabotage. That's like being in crippling debt and then deciding to spend $9 on this awful T-shirt from Sheehan. What, what? Is this what you think Americans want to buy? Oh, it has how many reviews, we have chosen pain. Two thumbs down. So when it comes to catching up for retirement,

the market is not your biggest threat. Inflation isn't your biggest threat. Indifference is. And unfortunately, indifference is what most Americans have adopted as their primary financial strategy. Just bury your head in the sand and hope the government takes care of you one day, or even worse, your kids. So given these reasons, $1.26 million is a higher number than most Americans are actually on track for. Is this study right that it's some magic number for a great retirement? Well, not really. And I'll explain what I mean in just a second. Right after I explain how to clean up your digital footprint.

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or click the link in the description below. Let me tell you about opening up a high yield savings account with online bank Laurel Road, one of the sponsors of today's video. Unlike most dusty old traditional savings accounts at brick and mortar banks, which offer horrible interest rates, Laurel Road offers competitive top tier APY, which lets your money grow way faster. Plus, they never charge any sneaky fees,

and there's no minimum balance required to open an account. And best of all, your deposits with Laurel Road are FDIC insurers so you know your money's safe and sound. So open an account today by going to Laurel Road.com slash George or click the link in the description below. Okay, so why do I think this study is off track? Allow me to get to my soapbox for a second because there's nothing I love more than standing on a box of soap.

It makes me taller. I don't care what kind of box it is. Shampoo, conditioner, whatever. Here's the truth bomb. There is no magic number for retirement. And that's because retirement is not one size fits all. Look at me. Do you think one size fits all?

all? And he's short. It's more like shopping at TJ Max. You got to try a bunch of things on to find the one that's right for you. And when you find that perfect fit, you're a true Maxinista. What I mean is that the amount you'll need in retirement depends on your individual situation and lifestyle. So let's go through some examples. Example number one, someone with a paid-for house and zero debt won't need as much in retirement as someone who still has a mortgage and consumer debt. Being debt-free in retirement means fewer monthly bills and less stress. On the other hand, if you're dragging around a car loan or lingering credit card balances into your 60s, you're going to need more money just to keep your head above water.

Example number two, someone who doesn't plan on traveling a lot in retirement won't need as much money as someone planning to do the most travel and take that Alaskan cruise that's been on the dream board for years. And traveling during retirement is a great goal, but it is more expensive than being a homebody. And final example, the longer you plan on working, the less money you'll need. If you're in a career you love and you have no plans to slow down in your 60s, you won't need as much as someone who's running straight for the exits on their 59-a-half birthday.

So moral of the story, your retirement goal depends on you. For some, $1.26 million is plenty of money. For others, it won't be nearly enough to live out their full retirement potential. And I personally would rather err on the side of caution and have too much in retirement versus having too little. So instead of relying on some mythical number given to you by an influencer on the internet or the folks at Northwestern Mutual, sit down and figure out your retirement vision. But no matter what that vision looks like, you do need to invest.

You can't just save your way to wealth using a savings account or a CD or bonds. You need to outpace inflation by being in the market in equities. So that's a non-negotiable. You got to invest if you want to retire with dignity. So where should you start? Start by investing 15% of your income into retirement each month consistently once you're debt-free with a fully funded emergency fund of three to six months of expenses. The reason is simple.

You need margin to be able to invest 15% and accomplish all of your other goals and live your life in the meantime. And if you're in crippling debt and you don't have an emergency fund, that is a recipe for disaster. So you do need to start now, but you also need to wait to be in a good financial spot to begin investing. And keep it simple here. There's no need to run after trendy investments like crypto or precious metals or the latest meme coin. Because when we surveyed over 10,000 millionaires, eight out of 10 said they just invested in their employer-sponsored retirement plan as the primary vehicle for reaching millionaire status. So keep investing in that 401K or 4.3B,

Work with an investing pro to pick mutual funds with a good long-term track record, and let compound growth work its magic. And if you're ready to start investing and you want some more tips to get started, I will leave a link with a great resource to our investing hub, which has a free retirement calculator, a free net worth calculator, and a free investing guide. Did I mention it is all free? Go check it out. And if you're wondering exactly how to invest like I do,

keep watching to check out this video where I'll walk you through my process step by step. You can also use the link in the description below. And if you enjoyed this video, be sure to hit the like, and subscribe to this channel so I'm not forced to retire from making these videos. Thanks for watching. We'll see you next time.