Hopefully by now, you’ve heard that it’s a bad idea to try to retire on Social Security alone. For one thing, those benefits are at risk of being cut if lawmakers don’t find a way to boost Social Security’s revenue.

But also, even without benefit cuts, Social Security might only replace about 40% of your preretirement wages. And most seniors need more money than that to cover their expenses without stress.

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That’s why it’s so important to save well for retirement during your career. And to that end, it can be helpful to come up with a savings number to aim for. But actually calculating that number isn’t so easy, since there are a lot of variables that need to go into it.

That said, a recent Northwestern Mutual survey found that Americans think $1.26 million is the magic number for a comfortable retirement. But is that the amount of savings you should be aiming for? Despite it being a large number, you may want to aim higher.

What a $1.26 million retirement looks like

A $1.26 million nest egg is nothing to scoff at. But a nest egg that size won’t necessarily translate into the retirement you’re hoping for.

Let’s assume you retire in your 60s and therefore need your portfolio to last for about 30 years. If we use the 4% rule, a $1.26 million savings balance amounts to $50,400 in annual income, not accounting for the inflation-based adjustments the rule allows for.

Of course, that $50,400 is on top of whatever Social Security pays you. But whether it’s enough for you depends on, well, you.

You might have plans to live in a big city in retirement and enjoy nice restaurants and frequent theater outings. You might also have the goal of taking a few overseas trips per year. An annual income of $50,400 plus Social Security may not get you there — especially if benefits are cut.

Also, you don’t know what your healthcare needs are going to look like. You may find that you’re spending more than expected on deductibles and copays just to take care of yourself.

Remember, too, that while $1.26 million will give you a certain amount of buying power today, the value of that sum is apt to erode over time due to inflation. So that’s another reason to consider aiming higher.

Also, if you have the goal of retiring early, that’s reason enough to try to save more than $1.26 million. The 4% rule may not be a good one to use if you’re ending your career in your mid- or late 50s and think your savings might need to be stretched for 35 years instead of 30.

Take that number with a grain of salt

It’s interesting that Americans have landed on $1.26 million as the amount of savings needed for a comfortable retirement. But you’re much better off setting a long-term savings goal based on your individual needs and wants.

Those should include:

• Where you want to live in retirement
• How you want to spend your days
• What healthcare needs you have
• How long you expect your retirement to last

You can use $1.26 million as a starting point in the course of your savings efforts. But ultimately, it’s best to come up with a number that’s personalized to you.

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