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Patrick Clark

Do You Really Need $2 Million to Retire? Understanding Your Retirement Needs in Massachusetts and New Hampshire and the Importance of a Personalized Retirement Plan


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If you're in your 50s or 60s, with children entering or exiting college, you may be wondering if you're financially on track for retirement. Many studies and articles claim that you need $2 million or more to retire comfortably. But is that really the case for everyone in Massachusetts and New Hampshire? 


In reality, the magic number for retirement isn’t one-size-fits-all. While a $2 million target may work for some, most people may be able to retire comfortably with much less—especially when taking personal goals and lifestyle into account. 

Let’s break down why $2 million may not be necessary and what factors truly matter for seeking a secure retirement.


Cost of Living in Massachusetts and New Hampshire


The cost of living varies greatly depending on where you live. In Massachusetts, particularly near Boston, housing and healthcare costs can be high, but New Hampshire is known for being more tax-friendly, especially with no state income tax. Both states currently do not have a tax on Social Security benefits. This can make a big difference in how much you’ll need for retirement.

For example, retirees in southern New Hampshire may find their dollars go further than those in Boston, where housing and property taxes can significantly impact your budget. Your retirement number might be significantly lower if you're considering relocating to a more affordable area.



Lifestyle Choices: What Does Retirement Look Like for You?


Your lifestyle is another key factor. Do you plan to downsize and move to a smaller home once your children leave for college? Do you envision traveling frequently, or are you happy with a simpler, quieter retirement?

For instance, if you plan to stay in your current home in Massachusetts and continue supporting children through college, your retirement expenses might be higher than someone downsizing to a smaller home in New Hampshire. These choices make a huge impact on how much you need to retire comfortably.


College Costs and Retirement: How to try and Balance Both


Many parents in their 50s and 60s are in the challenging position of balancing college costs for their children while also trying to save for retirement. If you’re helping your kids through college, you may feel pressure to put off retirement savings and potentially take on debt in the form of student loans. However, it’s possible to balance both by creating a well-structured financial plan.

Massachusetts and New Hampshire both offer various state college savings plans, tax benefits, and financial aid opportunities that can help reduce your out-of-pocket expenses. Additionally, by coordinating your college planning with your retirement strategy, you can avoid feeling overwhelmed by both goals.


Social Security and Other Income Sources


Don’t forget that retirement doesn’t rely solely on your savings. Social Security will likely play a role in your retirement income, and understanding how much you'll receive is crucial. For example, the average Social Security benefit for retirees in the U.S. is around $1,800 per month, but this depends on your work history and when you choose to claim benefits.

Massachusetts and New Hampshire have different tax policies regarding Social Security and pensions, so knowing the tax implications in your state can help you maximize your income in retirement. Your social security may not be taxed at the federal level as well depending on your overall retirement income and strategy.

Additionally, income from part-time work, annuities, or other sources can reduce the amount you need saved in your retirement accounts.



The Importance of a Personalized Retirement Plan


The bottom line is that retirement is highly personal. Studies and articles suggesting you need $2 million to retire comfortably often assume a certain level of spending, but these assumptions don’t apply to everyone. It’s far more important to focus on your specific situation and needs.

Working with a financial planner can help you develop a plan based on your own financial situation, goals, and lifestyle. Whether you’re in Massachusetts or New Hampshire, a comprehensive plan will help account for your savings, potential inheritance, taxes, Social Security, and other income sources to determine how much you’ll really need to retire comfortably.


Final Thoughts: Don’t Let the $2 Million Myth Hold You Back


If you’re starting to plan for retirement and are worried that you haven’t saved $2 million, don’t panic or give up hope which, for some people, can happen. Many people in Massachusetts and New Hampshire may be able to retire with much less, especially if they have a solid financial plan in place that takes into account their spending needs, goals and income sources. Focus on what matters most—your goals, lifestyle, and financial security.

Instead of chasing a specific number, work on creating a strategy that addresses your unique needs. After all, retirement isn’t about hitting a random savings target; it’s about living the life you’ve worked hard to build.

If you're unsure where to start, reach out to a financial advisor who can help tailor a plan to your specific situation. With the right approach, you can retire comfortably without the stress of hitting an arbitrary $2 million goal.


Disclosures:

Past performance is not indicative of future results. This material is for informational use only and should not be considered investment advice. Investing involves risk. Principal loss is possible. The opinions expressed are those of Guardian Wealth Advisors, LLC. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Investment advisory services offered though Guardian Wealth Advisors, LLC D/B/A Finance Roadmap Planning. Guardian Wealth Advisors, LLC (“GWA”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about GWA’s investment advisory services can be found in its Form ADV Part 2 or Form CRS, which is available upon request.

(GWA-24-76)


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