Should You Be Aiming for $1 Million in Retirement Savings?

It's important to consistently sock money away for retirement throughout your career, whether in an IRA account, a 401(k) plan, or a combination of both. You could even save and invest for retirement in a taxable brokerage account if you want the most flexibility and are willing to forgo some tax breaks.

But a big question a lot of people find themselves asking is just how much do they have to save. And often, you'll hear that the answer is $1 million.

A big reason so many people are drawn to that $1 million savings goal is because it's a nice, clean number, and also, a rather large one. And in a recent Natixis survey, respondents said they plan to live in retirement for an average of 23 years and need about $1 million to pull retirement off.

But should your goal be to amass a $1 million nest egg? Or is there a different number you should settle on?

It's all about assessing your personal needs

There's a reason financial advisors and experts don't tend to put out blanket advice when it comes to retirement savings. We're all different people, and we have all our own specific needs and goals. That's why it's more important to focus on those than a random $1 million target.

For some people, having a $1 million nest egg could mean retiring with extra money they don't even need to spend. For other people, a $1 million savings balance could mean having to sacrifice certain retirement goals.

But the reality is that it shouldn't matter to you how well other people will fare with a $1 million nest egg. It should only matter how well you'll do. And once you take the time to decide what you want your retirement to look like, it'll help you determine what savings goal to target -- whether it's $1 million or a completely different figure.

Start mapping out your retirement plans

If you're in your 20s, 30s, or even 40s, it may be difficult to figure out what you want your retirement to encompass. But it'll help to at least get the ball rolling.

Some of the questions it pays to ask yourself are:

• Do I see myself working in retirement? If so, whether for financial reasons or social ones, you may not need as robust a nest egg.
• Where do I see myself living as a retiree? If your goal is to retire in a major city where housing and living costs are expensive, it stands to reason you'll need a decent chunk of savings. If you think you'll be happy retiring on a small farm in a rural area, you might need a lot less money to pull that off.
• What do I want to do with my days? Some people put off travel during their working years and hope to do a lot of it in retirement. That can be an expensive hobby. On the other hand, if you got your fill of travel and think you'll be happy pursuing hobbies close to home in retirement, then you may not need to bank as much money for your senior years.

All told, a $1 million savings balance might serve you quite well in retirement. But don't assume you're doomed if you don't manage to save that much. And also, don't assume you're all set if you do save that much. Instead, think about your needs and goals and the amount of money it's likely to take to address them.