How Much Do You Need to Retire?

Knoxville Financial Q&A Episode 3 | How Much Do You Need to Retire?

April 14, 2026

How much money do you need to retire comfortably in Knoxville or East Tennessee? It's a simple question without a simple answer.

In Episode 3 of the Knoxville Financial Q&A Show, Paul Ragone and Brian discuss why retirement planning shouldn't begin with a predetermined savings number. Instead, the amount someone needs to retire depends on the lifestyle they want to maintain, the income sources they'll have available, their expenses, and the risks they may encounter throughout retirement.

The conversation looks at retirement from an East Tennessee perspective, including the potential impact of pensions, Social Security, housing expenses, Tennessee's tax environment, and differences in lifestyle and spending. Paul and Brian also discuss expenses that can be difficult to predict, including long-term care, as well as the risk of experiencing a significant market decline near the beginning of retirement.

For some retirees, a pension and Social Security may provide a substantial portion of the income needed to maintain their lifestyle. Others may depend much more heavily on withdrawals from retirement accounts and personal savings. That difference alone can dramatically change how much someone needs before retiring.

Rather than focusing exclusively on reaching a particular account balance, retirement planning involves determining how your assets and income can support the life you want to live throughout retirement.

Watch Episode 3 of the Knoxville Financial Q&A Show above for a discussion about how much you may need to retire comfortably in Knoxville and East Tennessee—and why your number may be very different from someone else's.

Sources:
1. https://www.cnbc.com/2026/04/07/how-much-money-americans-say-they-need-to-retire-comfortably.html
2. https://datacommons.org/ranking/Median_Income_Household/CensusZipCodeTabulationArea/geoId/47093?h=zip/37922&unit=$
3. https://www.nerdwallet.com/banking/calculators/compound-interest-calculator
4. https://www.elderlawetn.com/blog/01/how-much-does-long-term-care-cost

Transcript

I'm your host, Brian. I'm Paul.

And welcome to episode three of Knoxville Financial Q&A.

Today's episode, we're going to focus on just one question. You guys have sent in many questions, but this particular one

has pretty much been consistent throughout.

General consensus was um how much do I need to have saved to retire comfortably for East Tennessee for just for us? um

more preferably Knoxville. We didn't want to include everywhere like Oakidge and all the specific entities, but we'll we'll talk on that a little bit. Big picture, uh this question, there's a ton of different answers in all honesty, but just to basically zoom way out. There was a uh CNBC article that was released just yesterday actually and it took a study from Northwestern Mutual that said you should have 1.46 million to retire comfortably. In that same article though, Fidelity recommends savers have four times their annual salary by age 45 saved up and eight times by age 60 to be on track. I was looking at some of my clients after I read that. Um, most of my clients are, you know, closer to 60 and that that number is kind of pretty accurate. I assumed it would be a little bit more than that because I've read, you know, some different things. But I also look at it from the standpoint of I'm kind of in a different generational bracket. And so you have a big giant, you know, question mark towards that 20 30 years from now compared to now. And so yeah, I could see that being a lot more accurate for like today. But then you also have to think about like look at the inflationary period that we just had and how dramatic it was in a short period of time and think about that like for my generation and for people that are currently 40 and 20 years or 25 years from now you have another dramatic inflationary event all those numbers could get skewed. And if you're kind of planning to shoot for an inflation adjusted 1.46 in today's money. What does that look like for my generation? You know, that's a that's a pretty big, you know, I'd say that that probably puts that number closer to like four or five million.

Yeah. Well, okay. So, just thinking out loud here, your clients have a longer runway typically than mine do. Sure.

Right. And so my clients come in um they're generally older than Brian's clients and they basically have what they have and they're ready to retire. So whatever that number is, that's what we have to work with to create a plan. Hopefully it works. Um, and in their case, most of the time, I mean, my clients are predominantly engineers out in Oakidge and they're excellent savers and they live well below their means and there's typically plenty of money there, even if it's not 1.46. The other things about what they have is excellent benefits. Yeah. Yeah. Benefits matter. I mean, that's this goes back to kind of what we talk about all the time is um I've always said income is the only outcome that matters. You know, when you start

thinking about how much money do I need saved? Well, if you have a 50, 60, $70,000 a year pension income, you may not have to save as much as the person who doesn't have that. So, like having all of those factors, you know, this goes back to what we said originally. The point of this of this entire video is there's so many different factors at play. you got to stop and like look at each individual situation and how it

applies, you know, like um do you have rental properties? Do you have other income outside of maybe it's, you know, business income? Maybe you own a business and you sell it off and you have an income coming in from that for years. You know, every situation is different, of course.

And so, yeah, I think all of that matters. Um, and something I always bring up to my clients, you know, most people don't really truly plan for

retirement. Um, I've I've always used the joke that most people plan more for a 24-hour wedding day than they do for a 24-year retirement. Um, and so it's funny how that translates so many times. You know, the question I always ask people when we're talking about retirement savings is, do you spend more money during the week when you're working or on the weekends when you're not? And what happens when every day becomes the weekend? I was looking at our um income per by zip code to your point on saving four times or eight times or six times, whatever the the the simple math was that Fidelity was talking about. So for 37934 for for

Farragut it was its average income of 135,000 a year. Uh and this is based on um um data commons. Uh but it's a I

guess an analytical website. 37922 was $126,638.

37932 was $109,900. 37938 was $80,868. And so I'm not going to go the whole way down the list. Well we'll put it up on screen where you can see the see the the numbers here. But you know, it goes to your point on if you just simplified it and said four times I need to have four times my income at this at this age. I need to have 10 times my income at this age. I mean at a 10 times multiple you got 1.35 million. To your point at it it literally lands perfectly. So if you live in Farragate and you're, you know, probably in that Farragut area most of the time, you're going to be just fine. You know, like that's average income. If you look at my clients, a lot of times they might have that or more. Generally, they have more than that saved up in their 401k. Um, but because their pension is so good and then you add social security on top of that, I mean, they're almost making what they were making when they were working.

The other question is, do you actually ready to retire? Because a lot of people have this I know a lot

of my clients, the engineer guys in particular, like they have it nailed down to the second that they're going to retire. uh you know they retire for a couple months they realize that's their purpose in life it seems like right being being a great engineer or whatever you're doing and they're just not happy just not doing anything. So a lot of times boring very boring and they'll go back and do some consulting work or something like that which adds additional income and then they can possibly be making more than they were making than they were actually employed or overprepared. And then we go back to I think we talked about this uh during one of our other episodes. It was hard the RMD right challenge. You know, if

you become overprepared because you've got a good pension and you got good benefits and you got good income coming

in and then you start back to work, you know, we weren't planning on having that happen and now we have to plan on that. Yeah, it's you know, and you brought up and age range matters. You know, when you look at planning, you look at for us, you know, my age bracket has to sit there and go, well, should I count on social security? Is it going to be there for us? I don't know, right? You know, should pensions almost don't exist anymore for most of like I know that when I had uh a job, which was a very long time ago, but the idea was those weren't being presented to me as benefits packages. So like it's crazy to think about that that's pretty much gone for the most part. So now all of that planning becomes more important. And I think that's the one thing, you know, I I pulled this up just briefly because I wanted to do this. We'll do this live and you can see we'll do a screen record here. I'm going to record it right now. Uh but like compound interest, I think most people get to that point where they go, "Okay, well this is great that you're telling me I need 1.4 for or let's say it's inflation adjusted four three or four million, you know, how do I get there? What does that look like? And I think most people have a breakdown on actually implementing strategies to get where they want to go because they just get lost. It's like, okay, well, now what? Or, you know, we got a 2-year-old and an another one on the way. Life gets hectic. So you start looking, okay, well, yeah, so the average, this is average, 35 to 44 had an average retirement savings account between 91,000 141,000. So you figure if you fall in that 35 to 40 40 year old range, well, what do I need to have moving forward? What do I need to save moving forward to get there? So like 141,000,

which we're going to the tippy top of the the range. If you had 141,000,

you know, and you've got 20 years to save, you if you could average a 9% rate of return and put away 1,000 bucks a month,

you end up 1.5 million.

So, if the if the average stayed the same, you're right on par.

Okay. So, we started with the national average and now let's try to kind of zoom into the East Tennessee area.

Again, I know Brian mentioned um incomes per zip code, but Tennessee is a great state to retire in.

Um the fact that we don't have a state income tax is huge. And what that means is your social security doesn't get a state income tax. your 401k, pensions,

none of that stuff gets a state income tax. Of course, you're still subject to federal tax, but compared to most states, that's a it's a great place to retire. What we do have though is a high sales tax. Which kind of works out in your favor because like a lot of my clients, like I said before, they are not big spenders. They live below their means. They don't buy a lot of things. So, they're not paying a whole bunch of sales tax on proportionally. Yeah. Um, so it works

out well. And because of that, I think the the averages in Tennessee,

particularly East Tennessee, and maybe it's it's skewed a little bit now because it's become such a popular uh place where people want to move here and retire, but um I think our our averages are probably lower than 1.46 million probably, just, you know, based on the tax savings. Um, and based on a couple of things really, like like I said, a bunch

of my guys have um really great pensions and a lot of times they don't even touch

the their 401k savings after we roll it to an IRA or something like that. We don't they don't need it. Yeah. You know, they continue to live the lifestyle that they were used to without even touching the money that they saved up. Um, so I just ran some basically three scenarios here. So a lot of this depends on the lifestyle that you live, right? Yep. So based on I I looked at my clients and the assets that they have and how they live their lifestyles and I put together a really general um guideline for for here for East Tennessee. So, if you just live below your means and you just want a normal lifestyle and your house is paid off, um you can probably retire on 500 to 800,000. This is actual numbers based on clients that I have. Um if you're just a person that, you know, wants to live a a little bit more of an extravagant lifestyle, you can do it between 800 and 1.2 million. So what? Like traveling vacation once or twice a year, you know, maybe maybe taking the family to a Disney trip. Yeah. Taking the the grandkids That would be our comfortable number. So the 1.46 would be the people, you know, a couple times a year or the people that can take the whole extended family to the European vacation. The 1.46 number basically translates to the 800 to 1.2. Yeah. Is what I'm saying because we live here, right? And so if if you want a very very comfortable lifestyle, what that 1.46 number was relating to here, it would be between 1.2 and 1.8 million. So we are on the very comfortable side of comfortable at that range. Yeah, and that's a good point. I mean, you think about if somebody lives in California with 1.46, it won't go very far. you know, by the time you factor in their state income tax and then all the taxes for property and all the craziness that goes on, yeah, that matters. It all impacts everything.

The other thing when it comes down to planning though, which is something we have to talk about, too. So, impacts to that number that we're, you know, probably not calculating. Uh,

and we can bring this up too, is there's a uh website that was Elder Care Law of

Tennessee. Um, this is in no way an endorsement, but they had done some how much does long-term care costs and I think this is shocking for both of us. This was annual costs. So, if you have adult services 5 days a week, so that means 5 days a week, I'm guessing you have somebody come check on your you or your, you know, loved ones. It was between 12 and $25,000 per year. Um, I'm going to skip a few options here and go straight to like assisted living. So, assisted living, um, was between 36 and 50,000 a year. So, you know, if you've got somebody living on 60, 70, 80, and now they have to provide a $50,000 a year assisted living cost, that can severely impact somebody's, you know, amount of money saved. um nursing home, a private room in nursing home ranged from between 76 to 88,000 per year. Crazy. Because if you think you, hey, I've got 1.4 million. I'm I'm I fall in that really good range. We're one catastrophic thing away, uh or spousal, you know, any form of health event away from now. A lot of that income gets just siphoned away. And then like I'll I'll use my own example. You know, my I think my grandmother lived for almost nine years with dementia in a in an assisted living home or in a a nursing home. Um you know, you figure 88,000 a year over a 9-year period of time. If you don't have that income, you got to start planning for stuff like that.

The numbers I threw out there, you know,

the 500 to 800 depending on your lifestyle, that kind of thing, that's without pensions. And so if you're in that position where you have you have a million bucks and you you feel like you're comfortable with that amount and you can retire. One of the I would say the biggest things you have to look out for, let's say it was 2007, you have a million bucks. The market's doing well. you feel totally confident in your your lifestyle that that money is going to last you a long time and then 2008 and 2009 comes around kneecapsand you get the sequence of returns in your right as soon as you retire and that's a horrible situation. That's almost the worst case scenario that actually happened to some people. And so, you know, you kind of have to to plan for that as well. uh cuz those things do happen. We you know we see them on a 10-year cycle almost. So sequence of returns are are a huge factor and if you're if you get it right when you retire, it could be really really bad, detrimental almost. Yeah. And something we haven't even brought up is like tools in the tool belt to use for that. And this isn't in no way an endorsement for the for a product or any specific product. Um, but just the general structure, I think it gets frowned upon to use the term annuities. You said it like can't say the a word. And so, you know, if you just remove that that word annuity and you replace it with the word pension, the idea there is you're creating a self funded pension and that can insulate you from some of those sequence of returns things, you know, that can insulate you from, hey, we'll take money from here instead of take money from a 401k while the 401k is down and can rebound. So, you know, having some of those tools in your tool belt become extremely important. It's a way for you're not supposed to use the A word, but it it's a way to improve or insulate your situation. Um, and those all require just situation specific. And if you think about it this way, a lot of the the numbers that we have talked about have been based on the common 4% withdrawal rule, right? where we're talking the a word annuities, you know, right now some of them because of interest rates being what they are are paying six six and a half percent. Uh it's a lot higher than 4% and um you know, we're not suggesting you take all of your assets and do something like that. In fact, don't don't but peel off a little bit and maybe do something like that to offset any potential, you know, 2008 2009 scenario again.Yeah, I mean that's uh that 4% man I I you know I don't know how I feel about that. There's times where I look at that that 4% withdrawal rate and I'm like I mean it's really you look at what we had over the last couple years very very low interest rates which is a realistic possibility again at some point in the future. And so when you can only get one or 2% if you're trying to be very conservative and you're withdrawing four and you're only earning one or 2% it's it's cannibalizing. you're actually like eating away at that principle, eroding the principle. Whereas like you know and right now if you can get a CD rate of three and a half you can almost sustain your 4% withdrawal with safe money. So you know I don't know how I feel about that. I feel like it's a it's a in the periods of good or average

interest rates it works perfect and and lower inflation.

Yeah. And in a period of and its prime Yeah. inflation. I mean, what was inflation during like the the COVID stuff was like what almost 9 12%. So, you figure like you're losing a a purchasing power to the tune of 9 and a half%. Your safe money is earning four or five and paying out four or five, but you're eroding half of your purchasing power. That's crazy. Yeah. Um, you know, things like that matter.

Uh, it's hard to account for every scenario. I think you could drive yourself insane trying to account for every scenario, but at least talking

about it, you know, if you're meeting with other people and they're not bringing up things like that. Yeah, that's a very important conversation that you may or may not be having with your financial person.

Yeah. I think if you get anything from this, I don't think there's a magic number. No,

everybody's going to have a different number. Yeah. Some people are going to need 4,

5, 6, 7, 8 million cuz they want to travel or they want to um, you know,

have vacation homes for the family to visit. Some people could probably live on a half million or less, you know, like, hey, look, I I just want to, you know, sit on my back porch and and rock in my rocking chair and enjoy life and grill on my patio and who cares? Yep. Yeah. Maybe just delay social security income. Uh, or, you know, there's probably other options, too. you know, we're the stuff we're not thinking about. We're put on the spot. We're filming this. We're trying to kind of have a conversation and make it conversational. Even if you know, we talked scenarios where your house is paid off. And that that's a big thing and that helps a lot obviously when when you retire, but you don't ever really own your home, it seems like, right? You're always paying property taxes that you have to factor in. And guess what? They don't go down. They only go up. And so, depending on where you live in East Tennessee, that could have a big impact on for sure. you're the amount you're saving for retiring. So, just because of where you live, you know, there's other options here in East Tennessee that can be much more affordable. I'd say uh thank you for joining us for episode three of the Knoxville Financial Q&A. And again, these numbers are very general. Basically, there is no magic number to sum it up. It just depends on the lifestyle you want to live once you retire. And if there's not enough money there, you might have to make some adjustments. Sometimes wait four years, three years, five yearsability. Yep. Sometimes there's too much money and then you might have to talk to us about a trust situation, tax problems.

Yep.

So,

to close it out, thanks again for watching. Um, we This is going to be something that we're going to kind of focus on going forward is possibly just answering just one question. um and spending the whole episode on it. Yeah, because I mean if the questions end up being situational, it's not a simple answer. So, yeah. So, keep sending them in and uh we'll get to them. Maybe just one at a time or maybe we'll do, you know, an episode with a whole bunch at once again. Sure. So, we appreciate you watching. Signing off. Signing off. Thanks.