How to Save Enough to Spend $100,000 Every Year in Retirement

Live Your Dream Retirement

retired couple walking on the beach
ONOKY - Eric Audras / Getty Images

Would you like to live your post-career life in a house next to the ocean, volunteering at community and charity events, or golfing at the finest country club in town? With goals like these, let’s say that you need to spend $100,000 a year to live your dream retirement. That sounds like a lot, but your goals may not be as challenging as they seem. You most likely just need to make a realistic plan and stick with it.

Start Saving

The first step is to save, save, save! If you haven’t started yet it’s time to get going.

Putting aside a portion of your income into your retirement fund each month can help make your retirement fantasies into a realistic future.

Of course, if you plug the need for $100,000 per year into a retirement calculator, it’ll likely tell you that you need to have $2.2 million saved. That’s no small chunk of change. Don’t panic, though! Rather than relying solely on your savings, consider using these other sources of income to supplement your monthly cash flow and reach your retirement goals.

Delay Social Security

You can start receiving benefits at age 62, but your monthly payments will increase the longer you wait to take your benefits up to age 70. While there is no right or wrong way to handle your Social Security, it can be very confusing and nuanced, so you might want to speak with a financial advisor about the best way to optimize your benefit.

Are You Eligible for a Pension?

If you are a teacher or government worker you may still earn a pension. This is another factor to calculate into your monthly income. Check to see if your employer offers a pension plan, if you are covered, and make sure you understand how it works.

Consider Part-Time Work

Consider taking on some part-time work.

A part-time job will generate some extra income and will ideally be something you are interested in. If you like making jewelry you can open an online store and sell your jewelry at fairs or festivals in your community. If you love to golf, get a job as a starter or tournament marshal. Bottom line: find a job you enjoy and that works with your schedule.

Plan for Rental Income

There are several benefits to renting out a place if you are able to buy a new home without selling your current house. If you rent out your old place to a tenant, they will pay down the mortgage while you build equity in a home that will ideally increase in value. Also, ideally the rent your tenant pays will exceed the monthly obligation of your home resulting in extra monthly income.

Investment Income

This is why you saved! Your investment portfolio is the cornerstone piece of your retirement income. By investing for income, you’ll have cash flow from stock dividends, interest from bonds, and distributions from alternative investments like REITs (Real Estate Investment Trusts) or MLPs (Master Limited Partnerships). One of Wes Moss’ and Wela’s favorite rules of thumb is the “$1,000 Bucks A Month Rule” which says that every $240,000 you have invested should throw off about $1,000 per month in income.

If your investments are done right they can pay off well into your future. A solid investment strategy will help you reach your retirement goals.


Taking all of the above into consideration, we can see what it would take to generate that $100,000 annual income for a married couple:

Social Security = $2,000 per month ($1,000 each)

Part-time Pay = $2,000 per month ($1,000 from each of your jobs)

Pension = $0

Rental Income = $1,000 per month (after all expenses)

TOTAL = $5,000 per month

This would give you $60,000 in annual income, so you would still need to generate $40,000 per year from your investments. It would take about $850,000 in retirement savings to generate that amount of income. Not too bad if you are willing to start saving early and put in the time for planning.

Retirement doesn’t have to be scary and it is possible for everyone if you are prepared.

Less than half of Americans plan for retirement at all, so don’t let that be you! Balance your budget and start planning early - it can definitely pay off later.

Eddie Goepp is COO of Wela, a digital financial advisory service.