The amount you need to retire depends on desired annual spending, Social Security benefits, pension income, healthcare costs, and portfolio withdrawal rate. A common starting point is 25x your annual expenses, but Central Pennsylvania's lower cost of living compared to national averages can work significantly in your favor. We model your specific situation to determine your personal retirement number.
The 25x Rule — A Starting Point
The most widely cited retirement guideline is the "25x rule": save 25 times your expected annual expenses. If you spend $60,000 per year, you need $1.5 million in savings. This is based on the "4% rule" — withdrawing 4% annually from a diversified portfolio has historically sustained a 30-year retirement. But this is a rough starting point, not a plan.
Central Pennsylvania Cost Advantage
Central PA's cost of living is significantly below national averages. Housing costs in the DuBois, Clearfield, and Punxsutawney areas are 30-40% below national medians. Property taxes are moderate. Healthcare costs, while rising everywhere, benefit from regional hospital systems like Penn Highlands. This means your retirement savings stretch further here than in Pittsburgh, Philadelphia, or most East Coast metros.
Factors That Change Your Number
Social Security benefits (averaging $1,900/month nationally) reduce the amount you need from savings. Pensions — increasingly rare but still common for government and some healthcare employees — further reduce the gap. Healthcare costs before Medicare eligibility (age 65) can add $12,000-$24,000 per year to your expenses. Inflation erodes purchasing power over 30+ years. Long-term care needs, which affect roughly 50% of retirees, can add hundreds of thousands in costs. Each of these factors must be modeled specifically for your situation.
What is your retirement number?
We model your specific situation — income sources, expenses, healthcare, and goals — for free.
