The amount someone needs to retire depends on a lot of factors like how old you are when you retire and how much you spend in a typical month. In most cases, you'll need at least $500,000, but generally you'll want more than that. If you want to make $40,000 a year in retirement, you'll need around $1.18M invested.
Factors to consider when retiring
When deciding to retire, you have to think of a lot of factors which basically add up to "Can I live off of what I have saved?" If you can, then you can retire if you want. Of course, a lot of factors go into that decision. You will want to consider if your savings will earn enough money over the lifetime of retirement to cover your spending. The more that you plan on spending every year, the more you should have in your 401k or invested elsewhere.
How to prepare and have what you need to retire
The earlier you start saving for retirement, the better. Start today if you haven't already, because the earlier you start, the more you will earn. In fact, at an average return of 6%, you can double your money every 12 years. Starting even a year later can hurt this goal. And remember to take advantage of tools that allow you to lower your taxes, like an IRA or 401k. Using these can help you save a lot by retirement, as long as you don't withdraw from them early.
Another problem that can affect retirement is the amount of debt you hold. Ideally, you don't want to have to worry about any debt payments when you retire. It's also easier to save for retirement when you're out of debt. If student debt is one debt holding you back, then it may be worthwhile to refinance to an income share agreement (ISA). An ISA is a debt-free funding tool that allows you to only pay what you can afford. By refinancing to an ISA, you can have the ease of mind to know that your payments will always be affordable.
