Planning to Retire in 2025: A Complete Guide

Now let's look at a few scenarios: the best-case, middle-case, and worst-case ones if you're planning to retire soon. In the best-case scenario, you'll have saved enough money to retire comfortably, a sum that will provide enough income throughout your retirement.

What's enough? Well, how much money you need to retire with differs for different people, since it's based on your health, your expected longevity, your lifestyle, your location, and more.

If you're trying to determine how much money you need to retire, try thinking about it in terms of annual income instead of a big blob of cash. One rule of thumb is that in retirement, we should aim to live on 80% of our pre-retirement income. That's a rough guide, though.

If you expect to be much more active post-retirement than pre-retirement, perhaps doing a lot of international travel, you may need more. Similarly, if you suspect you might be in poor health and may require a lot of costly care, you may need more. If, instead, you expect to be mostly gardening, walking, and reading, you could get by with less.

Consider all your sources of income, and remember that you may be able to add more sources, such as some passive income. Typical sources of income for many people include Social Security, pension income, dividend income, interest income, annuity income, and rental property income.

If you determine that you'll need $60,000 annually in retirement and you expect $25,000 from Social Security and $15,000 from annuities, that leaves $20,000 in needed income. You can invert and use the 4% rule to convert that into a needed nest egg by multiplying it by 25. (That's because dividing 1 by .04, or 100 by 4, results in 25.) Doing so gives you $500,000.

A more likely scenario for many people is that they approach retirement with almost enough money. If that looks like you, what can you do? Well, you have some options. A good one is simply delaying retirement and continuing to work at your current job. That offers several benefits:

• You can save and invest more money.
• You'll be delaying taking anything out of your nest egg to live on.
• Your nest egg will have a little longer to grow, untapped.
• You'll end up having to support yourself in retirement for fewer years.
• You may be able to enjoy your employer-sponsored health insurance a little longer, saving some money.

You might also try semi-retiring for a few years. See if you can cut back the hours you work at your current job, perhaps to half-time. Or go ahead and retire from that job, but generate some income via a side gig or two. There are lots of side jobs you might try, such as driving for a ride-sharing company, selling handicrafts online, tutoring kids, pet-sitting, or freelance work.

In the worst-case scenario, you simply won't have enough money socked away to retire comfortably. If it's any comfort, you're not alone: A third of workers have saved less than $50,000 for retirement, per the 2024 Retirement Confidence Survey.

So, what can you do? Don't retire now or soon, if you can help it. Try to work at least a few more years than you wanted to, and if you can, work all the way to at least age 70. That's the age at which your Social Security benefits will stop growing, so you might as well start taking them then.

If your full retirement age for Social Security is 67 and you delay starting to collect until age 70, your benefit checks should be about 27% fatter. That can turn what would have been a $2,000 check into a $2,540 one, upping your annual benefits from $24,000 to more than $30,000. Starting to take Social Security benefits at age 70 will also take some financial pressure off you at that point, perhaps permitting you to work less.

Think outside the box a bit, too. You might rent out some space in your home on a long-term basis. If a boarder pays you, say, $600 per month, that's $7,200 in annual income. You might also relocate -- to a smaller, less costly home, a less costly part of the country, or even to another country.