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About 40%. That's how much of an average earner's pre-retirement pay Social Security replaces (SSA). The rest is up to you.
You need enough savings to cover the gap between what your retirement will cost each year and what Social Security, pensions and other lifetime income will pay, for as long as you might live. There is no single number: the Social Security Administration notes that most financial advisers say you'll need about 70% to 80% of your pre-retirement income from all sources, and that Social Security replaces about 40% for an average earner (SSA, 2026).
Example (an illustration, not a client): She expects to spend $6,000 a month. Social Security will pay her $2,500 a month. The gap is $3,500 a month, or $42,000 a year, before taxes. How much savings that takes depends on how long she lives, how the money is invested, inflation and taxes, which is why we model it instead of using one multiplier.
The question isn't “How much do I need?” It's “How much do I need every month, and for how long?”
It depends on your earnings and your claiming age. If you start benefits at full retirement age in 2026, Social Security replaces about 79% of average earnings for very low earners, about 43% for medium earners and about 28% for maximum earners (SSA, Understanding the Benefits, 2026).
For anyone born in 1960 or later, full retirement age is 67. Claiming at 62 pays 70% of the full benefit for life, and each year you wait after 67 adds 8% until 70 (SSA rules as of 2026). See our Social Security timing guide.
Medicare isn't free. The standard Part B premium is $202.90 a month in 2026, with a $283 yearly deductible (CMS, 2026). Higher incomes pay more, called IRMAA. See our Medicare basics and IRMAA guide.
Pre-tax money is taxed when you spend it. Withdrawals from traditional IRAs and 401(k)s are federal taxable income. Illinois generally doesn't tax qualified retirement income, including Social Security and IRA and 401(k) distributions (Illinois Department of Revenue, 2026).
$202.90 a month. That's the 2026 standard Part B premium, per person, before a single doctor visit.
Not sure where you stand 5–10 years out? Use our pre-retirement planning checklist.
Enough savings to cover the gap between your yearly retirement spending and your lifetime income from Social Security and pensions, for as long as you might live. SSA notes most financial advisers say you'll need about 70% to 80% of pre-retirement income from all sources (SSA, 2026).
On average, about 40% of pre-retirement earnings, according to SSA. If you start at full retirement age in 2026, it ranges from about 79% for very low earners to about 43% for medium earners and about 28% for maximum earners (SSA, 2026).
No. Your number depends on your spending, your lifetime income, how long you live, taxes, inflation, health costs and how your money is invested. That's why we model your gap instead of using one multiplier.
The 2026 limit is $24,500, plus an $8,000 catch-up if you're 50 or older. If you're 60 to 63, the catch-up is $11,250 instead (IRS, 2026).
No. In 2026 the standard Part B premium is $202.90 a month and the Part B deductible is $283 a year, and higher incomes pay more (CMS, 2026). Drug plans, Medigap or Medicare Advantage plans, dental and vision add their own costs.
Generally no. Illinois subtracts qualified retirement income, such as Social Security and IRA and 401(k) distributions, on the state return. Federal income tax still applies to pre-tax withdrawals.
We explicitly show you our value, in writing, before you hire us. If we can't prove it, you don't pay.
We serve Oswego and Aurora, IL, and virtually in all 50 states, from our office in Aurora, Illinois. Call 815-486-0722 or book a Clarity & Discovery Session.
This page is education, not legal, tax or investment advice, and it is not a promise about investment returns or tax results. Examples are illustrations, not clients. Your estate attorney drafts legal documents and your CPA prepares your returns; we coordinate the financial plan around them. Rules and figures change; confirm your own situation before acting. Pinnacle Private Wealth® is a marketing name used by Pinnacle Financial Planning, a Registered Investment Advisor. Registration does not imply a certain level of skill or training.
Reviewed by Dr. Pat Pachciarz®, The Pinnacle Group (Aurora, IL). Last reviewed October 18, 2026. Figures change; we re-check them against the sources above.