The idea that you must save at least $1 million to retire comfortably has become the go-to benchmark in personal finance. But for most Americans, that figure feels more like a fantasy than a goal. In fact, according to data from the Federal Reserve, the average retirement savings for those aged 55–64 is around $408,000, less than half of that so-called magic number. Yet people are still retiring and doing it well. So what gives?
We sat down with Ryan Thornton, a retirement advisor with more than 30 years of experience, to find out what really matters when it comes to preparing for retirement in today’s economy.
Why Your Lifestyle Matters More Than Your Savings
Thornton wastes no time busting the biggest myth: “How much you have in your portfolio is the wrong question,” he says. “What’s more important is how much your lifestyle costs.”
In other words, retirement readiness isn’t about hitting an arbitrary savings goal, it’s about understanding your actual expenses and matching them to your income sources. That might include savings and investments, but it also includes Social Security, a pension (if you’re lucky enough to have one), part-time work, or even rental income.
As of 2025, the average monthly Social Security benefit is just under $2,000. That’s nearly $24,000 a year and if you think of that as income generated by a savings account, it’s like having an extra $500,000–$600,000 in your portfolio. That’s a huge head start, even if your savings fall short of seven figures.
Making $300K–$700K Work for Retirement
If you’re entering retirement with savings between $300,000 and $700,000, you’re not alone. Many households fall within that range and contrary to popular belief, you’re not necessarily behind. Thornton explains that this level of savings can support a fulfilling retirement, especially when combined with Social Security and thoughtful financial decisions. “Trying to make up for lost time with risky investments is one of the most common mistakes I see,” he says. “Slow and steady contributions, cutting back on unnecessary spending, and understanding how your income sources work together can get you where you need to go.”
He encourages pre-retirees to start by tracking their current expenses, identifying potential changes post-retirement, and creating a realistic monthly budget that prioritizes essentials and enjoyment.
The Power of Smart Lifestyle Choices
If you’re not working with a million-dollar portfolio, the decisions you make about where and how you live can have an outsized impact on your retirement security. Thornton encourages clients to look at housing as both an expense and a potential asset. If you own your home and have built significant equity, you might consider a reverse mortgage, also called a Home Equity Conversion Mortgage (HECM). This allows you to tap into your home’s value without selling or moving, giving you more flexibility with your cash flow.
For some retirees, downsizing to a smaller home or relocating to a more affordable region can help stretch savings and reduce monthly expenses. And if you’re open to it, part-time work or consulting can keep you mentally engaged while easing the financial burden.
Healthcare, too, plays a key role. While Medicare covers many basic needs, planning ahead for supplemental coverage, out-of-pocket costs, and potential long-term care is essential. A bit of planning now can help avoid major financial surprises later.
Learn more about Reverse mortgages here or explore Medicare planning resources.
Retirement Isn’t a Number, It’s a Plan
The truth is, retirement looks different for everyone. Some people thrive with modest means and a minimalist lifestyle. Others find happiness in flexible work, travel, or volunteering. What matters most is crafting a plan that reflects your needs, goals, and values. “Where you are today is a result of all the choices you’ve made so far,” Thornton says. “But every new decision can move you closer to a financially secure and fulfilling retirement.”
Don’t let the $1 million myth scare you into thinking you’re unprepared. Focus instead on your monthly cash flow, lifestyle alignment, and long-term goals. With the right mindset and guidance, retirement becomes less about how much you’ve saved and more about how wisely you live.
About the expert
Russ Thornton is a retirement advisor with over 30 years of experience in the financial industry. His true passion lies in helping women navigate the transition into retirement with clarity, confidence, and peace of mind. Russ believes retirement isn’t just about the numbers, it’s about living life on your own terms and leaving a meaningful legacy. Learn more about Russ and his work at WealthCare for Women.
