Tell Your Friends

The NY Times had an article about retirees that have had to go back to work because their retirement math wasn't working out for them. A few of the people profiled simply did not have an adequate understanding of how the dollars and cents of retiring work. It might have been a lack of planning, not sure, but they simply did not understand. 

Most of the stories started before AI was commonly used. Now that AI is ubiquitous, anyone can use it to build a very basic framework. I'm not saying it will get everything right at this point and maybe there are some biases to sift through but in terms of an elementary starting  point where before there was less help available, AI can be helpful. 

Using Copilot, I told it I was going to make up a scenario, then ask some questions and I asked to keep the answers short. Here's the conversation with Copilot.

Roger: I am a 57 year old male. My wife is 55. We both want to retire when I am 65. My wife is in good health and I take a statin and blood pressure medication. We have a combined $300,000 in our 401ks and $26,000 in an emergency fund. I make $68,000 and my wife makes $51,000. We spend $6500/mo but that includes a mortgage that will be paid off when I am 67. First question is how much more do we need to save to be able to afford retirement?

Copilot: About $1.1M–$1.3M total by age 65 (including your current $300k).

Very rough rule‑of‑thumb math:

Spending drops to ~$5,000/mo once mortgage ends.
With Social Security, you’d want ~$1.1M–$1.3M to retire comfortably at 65.

You’re about $800k–$1M short, which means saving roughly $35k–$45k/yr combined (including employer matches + growth) gets you close.

Roger: What would you estimate our combined social security benefits to be if we both take it when I turn 65?

Copilot: Very rough estimate: ~$48k–$52k/yr combined if you both claim when you are 65.

Breakdown:

You at 65: ~$32k–$35k/yr
Wife at 63: ~$16k–$17k/yr

Total: about $4,000–$4,300/month.

Roger: If social security will be $4000/mo and we spend $5000 after the mortgage is paid off, why do we need $1 million dollars saved?

Copilot: Because the $1,000 gap isn’t the real gap — the real gap is inflation + longevity + market risk.

Super short version:

Your $5,000/mo at 65 becomes $7,000/mo at 75 and $9,000/mo at 85 with normal inflation.
Social Security doesn’t fully keep up with your rising spending.
You need savings to cover the growing gap for 25–30 years, not just the first year.

So the $1M isn’t to cover the first $1,000/mo — it’s to cover decades of rising costs and protect you if markets underperform or you live into your 90s.

Roger: Is the $35,000-$45,000 you think we need to save for both of us combined?

Copilot: Yes — that’s combined, not each.

Very short version:

You need to grow from $300k → ~$1.1M–$1.3M by age 65.
That requires roughly $35k–$45k/yr total household saving + growth.

 Roger: At most, we can only save $25,000/yr where will that leave us when I am 65?

Copilot: Very short answer: about $650k–$750k total by age 65.

Here’s the quick math:

You save $25k/yr for 8 years → $200k contributions
Assuming ~6% growth → your current $300k grows to ~$480k
Your new contributions grow to ~$170k
Total at 65 ≈ $650k (low return) to $750k (normal return)

So you’d end up about half of the ideal $1.1M–$1.3M target. 

Roger: What should we do if we are that far short of what we need?

Copilot: Here’s the short, blunt version:

If you retire at 65 with $650k–$750k, you’re not doomed — but you can’t run the same plan as someone with $1.2M. You’d need to adjust one or more of these levers:

1) Work longer (even part‑time).

Working to 67–68 shrinks the gap dramatically: more savings, fewer years to fund, higher Social Security.

2) Spend less.

If you can get spending to $4,000–$4,500/mo after the mortgage ends, the plan becomes workable.

3) Use home equity later.

Downsizing or a reverse mortgage in your 70s can fill the late‑life gap.

4) Delay Social Security.

Waiting to 67–70 boosts benefits 14–24%+, reducing how much savings you need.

5) Keep investing aggressively enough.

A too‑conservative portfolio makes the shortfall worse.

In practice, most households in your situation combine #1 + #2, and that’s usually enough to make the math work safely.

Roger: What other questions should I ask?

Copilot: Here are the short, high‑impact questions that make a retirement plan go from fuzzy to clear — perfect for your blog post’s point that AI can walk people through a framework.

1) What will our spending really be after the mortgage ends?

Most people never separate “today’s spending” from “retirement spending.”

2) How much of that spending will Social Security cover?

This tells you the size of the income gap.

3) How much will our savings grow by retirement?

People underestimate compounding and overestimate returns.

4) How long do we need the money to last?

Longevity is the silent risk.

5) What happens if returns are below average?

A simple “bad decade” scenario changes everything.

6) What levers can we pull — work longer, spend less, delay SS, downsize?

Retirement math is flexible once you see the levers.

7) What’s our safe withdrawal rate given our situation?

Not everyone gets 4%; some get 3.5%, some get 5%.

8) Are we invested appropriately for growth before and after retirement?

Too conservative = running out of money; too aggressive = volatility panic.

9) What’s our plan for healthcare before Medicare?

This is the #1 surprise cost.

10) What’s our plan for late‑life expenses (long‑term care, home repairs, etc.)?

This is where many retirements break.

Ok so that was the entire exchange. If you're reading a blog as obscure as this one, then you may know most or all of what Copilot said but you know people who don't. This can be solvable for people who realize they need to put some effort in to figuring this out but maybe they need some encouragement (from us) to get started. 

The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.