Are We on Track? A 48-Year-Old Couple's Retirement Check

Picture the conversation. It's a Sunday night, the kids' college brochures are on the counter, and one of you says, "Okay, honestly, are we on track?" Nobody wants to say the number out loud, because nobody's sure what a good number even is. If that sounds familiar, you're in good company.

So let's make it concrete. Below is one clearly hypothetical household. They aren't real people, and nothing here is advice. They're a worked example so you can see how the check is built.

Meet Alex and Jordan (hypothetical), both age 48.

• Incomes: Alex earns $110,000 and Jordan earns $70,000, so $180,000 combined.
• Housing: a mortgage with about 18 years left.
• Kids: two teenagers, aged 15 and 17, with college costs coming in the next several years.
• Alex's 401(k): $260,000, with Alex contributing 8% and the employer adding 4%.
• Jordan's 401(k): $140,000, with Jordan contributing 6% and the employer adding 3%.
• Roth IRA: $45,000, with $3,000 added each year.
• Cash: $30,000, treated as an emergency fund and not counted toward retirement.

Add it up. Retirement accounts total $445,000. Yearly savings, including employer match, are $8,800 + $4,400 + $4,200 + $2,100 + $3,000 = $22,500, or 12.5% of household income.

Every assumption, stated plainly:

• Both retire at 67, which is 19 years away.
• Investments earn 6% a year nominal and inflation runs 2.5%, so the real return is about 3.4%. Everything below is in today's dollars.
• Salaries keep pace with inflation, so yearly savings stay flat in real terms.
• College is paid from cash flow and other savings, not from retirement accounts.
• Retirement spending is $100,000 a year in today's dollars, including taxes. That's roughly 56% of current income.
• Combined Social Security at 67 is an assumed $52,000 a year. This is a placeholder. Real estimates come from each person's statement at ssa.gov.
• The reader's mileage varies: returns aren't guaranteed, and investing involves risk, including loss of principal.

The projection. Growing $445,000 for 19 years at a 3.4% real return gives about $840,000. Adding $22,500 a year for 19 years adds roughly $587,000. That's about $1.43 million in today's dollars at 67.

Social Security covers $52,000 of the $100,000 target, so the portfolio would need to supply about $48,000 a year. That's roughly 3.4% of $1.43 million. Many planners discuss a starting withdrawal rate near 4%, drawn from research popularized by planner William Bengen in the 1990s, as a rough yardstick. Under these assumptions, Alex and Jordan sit under that line. Change the assumptions, though, and the picture shifts.

Now the part that makes people wince. A widely cited rule of thumb comes from Fidelity Investments, which publishes age-based savings milestones as multiples of salary: roughly 4x salary by age 45 and 6x by age 50, with 10x by age 67. Interpolating, someone at 48 would be looking at about 5x.

On $180,000 of household income, that's about $900,000. Alex and Jordan have $445,000, or about 2.5x. On the benchmark, they look roughly halfway there. Fidelity's guidance also assumes saving around 15% of income including employer contributions, versus 12.5% here.

So are they behind or fine? Both pictures come from the same couple. That's the problem with blunt tools. Benchmarks like this typically:

• Bake in their own assumptions. Fidelity's milestones assume a retirement age of 67 and a target of replacing about 45% of pre-retirement income from savings, with the rest from other sources. Your target may differ.
• Ignore your real spending. A couple with a paid-off home and modest tastes needs a different number than one planning to travel.
• Skip your Social Security record. Two incomes mean two earnings histories and two benefits. See your own at ssa.gov.
• Don't see the mortgage or tuition. A mortgage ending at 66 and tuition bills ending at 22 change cash flow dramatically.
• Treat accounts as identical. Traditional 401(k) dollars are taxed on withdrawal, while Roth IRA dollars generally aren't if rules are met. Withdrawals from the two aren't equal in spending power.

A benchmark is a smoke detector, not a diagnosis. It can tell you to look closer. It can't tell you what you'll have.

Here's where a projection earns its keep. Changing one input at a time on Alex and Jordan's baseline (3.4% starting withdrawal need, $1.43 million at 67) shows how much each lever matters. These are illustrative results only, and they simplify taxes and the years between retiring and claiming.

1. Savings rate. Saving 3% more of income, about $5,400 a year, adds roughly $141,000 by 67 and lowers the portfolio need to about 3.1%. Saving 3% less does the reverse. It matters, but over 19 years its effect is moderate. For more on how people think about contribution levels, see our post on what percentage of income to save for retirement. For reference, the IRS 2024 limits are $23,000 for a 401(k) and $7,000 for an IRA, with higher catch-up limits from age 50. The limits change, so check irs.gov.

2. Retirement age. This lever works three ways at once: more years of saving, fewer years of withdrawals, and a larger Social Security check.

• Retire at 65: about $1.29 million, with Social Security reduced to roughly 87% of the full benefit. The portfolio would need to cover about 4.3% a year, and health coverage before Medicare at 65 becomes a question.
• Retire at 67: the baseline, about 3.4%.
• Retire at 70: about $1.65 million, with Social Security at 124% of the full benefit. The need falls to about 2.2%.

That's a big swing from a few years.

3. Social Security claiming age. For anyone born in 1960 or later, full retirement age is 67, per the Social Security Administration. Claiming at 62 pays about 70% of the full benefit, and waiting until 70 pays about 124%. Holding everything else at the baseline, claiming at 62 pushes the portfolio need to about 4.5%, and claiming at 70 lowers it to about 2.5%. The catch is that waiting means the portfolio covers more in the early years. Our post on full retirement age 67 goes deeper on the timing trade-offs.

4. Spending in retirement. Every $10,000 a year in spending moves the withdrawal need by about 0.7 percentage points here. At $90,000 of spending, the need falls to about 2.7%. At $110,000, it rises to about 4.1%. Spending is the lever people tend to underestimate, because it's the one that defines the goal itself.

Notice the pattern. The savings rate gets the attention, but retirement age, claiming age and spending often carry more weight. A related read on why one number rarely settles things is our look at whether $1 million is enough.

You can repeat this exercise at your own kitchen table. A common approach is to work through these pieces in order:

1. Gather balances. List every 401(k), IRA, Roth account and HSA, then add what you and your employer contribute each year. Many people leave cash reserves out of the retirement total.
2. Pick explicit assumptions. Choose a retirement age, a return, an inflation rate and a spending target. Writing them down matters more than getting them perfect. Try a cautious set and an optimistic set.
3. Pull your Social Security estimates. Each spouse can view a personal estimate at ssa.gov, and the numbers differ by claiming age.
4. Project forward in today's dollars. Grow current balances and contributions to your retirement age, as done above.
5. Compute the gap. Subtract Social Security and any pensions from spending, then divide what's left by your projected portfolio. Compare that rate with the yardsticks you find reasonable.
6. Move one lever at a time. Shift retirement age, claiming age, savings and spending separately to see which matter in your household.

Some households also layer in college costs, mortgage payoff timing and health care before Medicare, which is why many people find a calculator or a conversation with a professional useful. If you're worried you started late, our look at starting at 45 shows how catch-up contributions and timing interact.

Important disclaimer: fidser. is not a registered investment adviser, certified financial planner or fiduciary. This article is general education built on a fictional household and stated assumptions. It isn't personalized advice or a recommendation. Actual results depend on markets, taxes, health and many other factors. Please consult a qualified financial adviser or planner before making financial or investment decisions.