How much do you need to retire comfortably? That will vary by the person or couple, depending on their circumstances. If you expect some pension income, you might have to save less. If you have no pension and want to do a lot of traveling around the world, you may want to stash away more.

Let's assume that you earn $75,000 and that you want to retire with $1.2 million. Here's how you might do it.

A smiling and laughing couple seated on a sofa.

Image source: Getty Images.

Why $1.2 million?

Depending on your expected needs in retirement, you might well want to have $1 million to $2 million (or more) for retirement. That's especially true if you're still many years away from retiring. While $1 million might sound great right now, in 25 years it could have the purchasing power of only $500,000 because of inflation. Over many years, inflation has averaged roughly 3% annually, though it can be much higher (or lower) in various years, as has been made evident lately.

You'll need to have a withdrawal strategy by retirement, which will tell you how much you can take out of your nest egg each year with a low probability of running out of money. For example, one strategy is the 4% rule, which assumes your portfolio has 60% of its assets in stocks and 40% in bonds and has you taking out 4% of your assets in your first year of retirement and adjusting subsequent withdrawals for inflation.

It's not perfect -- for instance, you may not want your portfolio to be 40% in bonds; if the market heads south for a while, you may want to take out less, not more.

Still, the 4% rule can be a handy rough guide as you plan. If you want to play it more conservatively, which isn't a bad idea, you might change the initial withdrawal from 4% to 3.5% or even 3%. If you don't mind taking a riskier approach, you might change it to 4.5%.

With $1.2 million, that 4% withdrawal amounts to $48,000 in your first year. On top of that, you'll likely have at least some Social Security benefit coming in. The average monthly Social Security retirement benefit was recently $1,668, or about $20,000 annually. You could well collect more than that. If you're receiving, say, $30,000 and you have $48,000 from your own coffers, that's $78,000 in annual income, which is close to what you were earning pre-retirement.

It all comes down to math

Here's exactly how you might amass that $1.2 million (or more):

Growing at 8% a Year for

$10,000 Invested Annually

$15,000 Invested Annually

$20,000 Invested Annually

5 years




10 years




15 years




20 years




25 years




30 years




Calculations by author.

See? It can be done if you sock away $15,000 annually for about 25 to 26 years and if your nest egg grows at an average annual rate of 8%. Not everyone can manage to save $15,000 annually, but some creativity and determination could help you get there. You might, for example, take on a side gig to increase your income.

If you can save even more than $15,000 per year, you'll end up with a bigger nest egg. (Check out the numbers in the $20,000 column!) Letting your money grow for longer than 25 years can help you end up with more, too, as you can see in the $10,000 column.

If you have fewer than 25 years for your portfolio to grow, you can still make your retirement more comfortable by saving aggressively and investing effectively.

How to invest your money

It's important to be saving and investing for years, but just how should you invest those crucial dollars? The easiest way to benefit from the long-term growth of the stock market is by plowing money into one or more low-fee broad-market index funds, such as ones that track the S&P 500.

The stock market has averaged annual gains of roughly 10% over long periods, and if you're invested in a broad-market index fund, you'll earn close to the same return as the market, whatever it is over your particular investing time frame.

If you want to invest in some individual stocks, too, you might add some dividend-paying stocks to your portfolio, as they can perform well over time. And most will keep delivering cash to your account even when the economy slumps. Note that many index funds will also pay dividends, if the stocks they hold do so. The SPDR S&P 500 ETF (SPY 0.94%), for example, recently yielded 1.4%.

To aim for even better growth rates than those offered by the overall stock market, consider adding some growth stocks to your portfolio, tied to companies growing at faster-than-average rates. Consider following The Motley Fool's investing philosophy, which suggests owning 25 or more stocks, and holding them for at least five years. That can give even overvalued stocks a chance to grow -- or to fall, and then recover.

Take some time to figure out how much money you'll need by retirement, and then come up with a solid plan for how you'll get there. You can probably amass much more than you thought possible if you take some steps now, and then stick to your plan.