I set a goal of retiring with $20 million but now I’m halfway there and feel stuck

There’s nothing wrong with setting a large savings goal for your retirement. That goal could be $5 million, $10 million, or more.

But that number should be based on something concrete. And it should also be realistic for your financial situation.

In this Reddit post, we have a couple in their late 30s that’s getting frustrated because they seem stuck in the middle of their savings journey. They have a goal of retiring with $20 million but they’re only halfway there. And they want to know how they can work toward their goal.

It’s a shame for a couple with many millions of dollars to feel like they aren’t progressing. So it may be time to rethink their goal.

What a savings goal should be based on

I see a lot of people set random savings goals for retirement, with $1 million being a popular one. But my issue is that these goals aren’t based on anything specific — they’re just numbers.

This is how I think people should set a savings goal for retirement. First, think about what you want your senior years to look like and what that lifestyle will cost. Next, think about your preferred retirement age. That should give you a sense of how long your money needs to last.

From there, work with a financial advisor to come up with a savings figure to target. Part of that equation should include estimated portfolio returns, which will hinge on how you invest.

If you do this exercise, you may find that you need $1.8 million to pull off your dream retirement. Or $2.6 million. Or $3.4 million. Or a completely different number. But it should be based on your needs and wants.

What I get the sense that the couple in the post above did was decide, “Hey, $20 million sounds like it’ll make for a sweet retirement, so let’s go with that.” That’s not a logical way to go about things, though.

Make sure your savings goal is grounded and realistic

It’s okay to set lofty retirement savings goals. But the number you arrive at needs to be realistic given your circumstances.

If you’re 45 with $500,000 saved and your goal is to retire at 55 with $5 million, that’s probably not going to happen if you earn $200,000 a year between now and then. And setting an unrealistic goal is only going to mean setting yourself up for disappointment.

So I think the couple above should do some number-crunching and maybe reset expectations. And if they still want to aim for $20 million, so be it. But they should be patient with themselves if they feel stuck at the halfway point and think about what sacrifices it’ll entail to double their savings.

They may, after doing some soul searching, come to the realization that they can enjoy a comfortable, rewarding retirement with $12 million, or $14 million, or a figure that’s less than $20 million. And if they really want that $20 million, they may want to get help from a professional in growing their portfolio to that level.