How much you need depends on what you spend. (iStock)

Exactly how much money will you need to retire comfortably?

The majority of Americans think they will need less than $1 million, according to the Merrill Edge Report Fall 2016. But 19 percent have no idea how much they will need.

The breakdown:

  • 9 percent think they will need more than $2 million
  • 14 percent believe they will need $1 million to $2 million
  • 24 percent say $500,000 to $1 million
  • 23 percent say $100,000 to $500,000
  • 9 percent say $0 to $100,000
  • And 19 percent say they just don’t know

Even with many Americans underestimating their “magic number,” Merrill says, 40 percent of retirees said their estimates would be difficult to reach or are “virtually unattainable.”

“In order to reach their retirement goals, nearly one in five (17 percent) respondents are relying on luck, saying they would need to win the lottery,” according to the report.

The truth is, and many financial planners will tell you, there is no “magic number.” How much you need to save for retirement will depend on how much you spend. Even someone who saves $2 million will run out of money in retirement if they overspend and don’t adhere to a budget. And someone who has only $500,000 might live comfortably if they have a lifestyle that does not require much cash.

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Question of the week: 

Some financial planners say expenses in retirement are only 80 percent of what they are when you are working. Others say your expenses don’t go down at all. What is you experience? Send comments to rodney.brooks@washpost.com. Please include your name, city and state. In the subject line put “Retirement Expenses.”

Sybil Kelly in Minneapolis wrote: 

I retired at 55 to care or my twin grandsons so my daughter could continue to grow in her career, and because I really hated my job.

I am now almost 68, the boys are in the 8th grade. I have been tracking my expenses for 30 years (which is why I was able to retire so early) and I think it depends on how you live before you retire. I paid of my mortgage 20 years ago, have no credit card debt, have always lived frugally, so I spend about the same now as I did before. And since over half my portfolio is in stocks, my investments have done quite well. So well, I can afford to fund trips and other extras for the boys.

Virgil Cook wrote:

I retired with an excellent defined pension plan with the state of Virginia. I was an English professor at Virginia Tech. I retired on June 30, 2002, after 39 years.  I knew that volunteering, pursuing hobbies and reading things that I’ve always wanted to read would make for a good retirement.  I have not been disappointed.  I tell people that I enjoyed my work very much, never dreading Monday morning, but I have enjoyed retirement even more.

Kathleen Davies wrote:

The 80 percent figure on retirement is far more than what I have spent and spend.  My expenses are only about 40 percent of what they were. However my strategy to reduce them was drastic.  I sold my house in Minnesota for a large profit and purchased a nicer home in rural New Mexico for half (with 20 acres). I don’t have a mortgage. The property taxes, health care and insurance are far less in New Mexico than in Minnesota. Also in moving to New Mexico, my lifestyle is less about dining out. Travel and entertainment are more about being outside. It was easy to cut things like cable (I’m more of a reader than TV watcher), use Netflix instead of going out to movies.

Property tax comparison: Minneapolis in 2007 $6,000 per year; Mountainair, N.M. 2007 $1,500.

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