Don’t expect your spending to drop after you retire. It’s true that you won’t spend as much on some items, such as work-related expenses and retirement plan contributions, but you’ll probably spend more in other areas because you’ll have more time for vacations and leisure pursuits. If you think you’ll spend two-thirds or three-fourths of what you spend now, after you retire, try living on that much for a while before making concrete plans.
The reality: most people spend pretty much the same amount after retirement as they did before. You probably should have 20 times as much as you plan to spend in order to be comfortable.
That is, if you expect to spend $25,000 per year, over and above what you’ll receive from a pension and Social Security, you probably should build a portfolio of around $500,000.