Arka Financial Services

How Much Is Enough to Retire Comfortably?

This question likely plays on repeat in the minds of people approaching the later years of their careers. But the more important question is not just how much is enough, but what does “comfortable” really mean?

There's no single formula or thumb rule using which we can answer this question, since every family's financial situation and their needs are different.

It is certainly possible to build financial models to estimate how much is required for retirement. These models rely on hard facts—current income, expenses, assets—and reasonable assumptions such as life expectancy, investment growth rates, and retirement spending patterns. They also account for income from sources like Social Security, pensions, or annuities.

We can further strengthen these projections by modeling high-probability scenarios: market corrections, rising healthcare costs, or the potential need for long-term care. Incorporating such factors helps create an additional cushion and improves the reliability of the plan.

However, comfort is ultimately a state of mind. It is shaped by an individual’s past experiences, risk tolerance, outlook on the future, and emotional relationship with money. As a result, two people with similar financial profiles may feel very differently about their readiness to retire.

Some individuals with modest assets feel perfectly at ease, while others with substantial net worth remain anxious. These represent the extremes, with most people falling somewhere in between—often finding comfort once they are confident, through well-designed models, that their resources are sufficient.

As a financial planner, my role is to build and stress-test these models to determine whether someone has enough to sustain their desired lifestyle in retirement—and, just as importantly, to help them gain the confidence and peace of mind that comes from that clarity.

Finding the Sweet Spot: Wealth vs. Wellbeing

​Finding the right balance between saving for the future and enjoying the present is a delicate art.

​We have all seen the extremes: the individual who saves every penny, living a life of austerity only to miss out on the joys of today—and the one who lives like royalty during their career, only to face financial hardship in retirement. Neither path is sustainable.

​Many people operate on the "delayed gratification" model, assuming they will enjoy their wealth once they retire. However, life is unpredictable. Health challenges or family obligations can often change our plans before we reach the finish line.

​As a financial planner, my goal is to help you find that "middle way." We can determine a strategic savings rate that secures your future while ensuring you have the freedom to create memories today.

Not All Financial Planners Are the Same

Financial planners generally fall into two broad categories based on how they operate — Fee-Based and Fee-Only.

Fee-Based Financial Planners often go beyond financial planning by offering services like portfolio management (typically charging up to 1% of assets) or selling insurance products. While this may seem convenient, their income can depend on how much clients invest or buy — which may not always align with the client’s best interest. Additionally, many fee-based planners work only with clients who have a minimum portfolio size.

Fee-Only Financial Planners, on the other hand, focus solely on providing unbiased financial planning for a fixed fee. Since they don’t earn commissions or manage investments, their recommendations remain completely objective and client-centered.

I run an independent Fee-Only financial planning practice, charging $2,000 for the first year, well below the industry average. There are no hidden fees, and the potential financial benefits often far exceed the cost. I do not manage client portfolios, so you retain full control over your investments and decisions.

The greatest value I offer is providing a clear, realistic picture of your financial health — helping you understand where you stand relative to your goals and identifying actionable ways to strengthen your net worth.

If you’d like to learn more about how my services can help you and your family, I’m just a message away.

Ticking Time Bomb

Estate taxes are a ticking time bomb. They are the taxes to be paid by the estate of an individual when the estate value is beyond the exemption limits which are $13.99M per person in 2025. If the limits set by the TCJA in 2017 are not extended, the limits will drop to around $7M per person ($14M per couple) in 2026.

The estate taxes are extremely high and touch 40% if the taxable estate is over $1M.

It may sound that the limits are pretty high and one doesn't have to worry. But you may have to think twice.

Take for example, if a couple who are 40 years old and have $2M in their investments, if the investments grow at 8% per annum, the value of the estate shall be over $90M, if the couple lives up to the age of 90 years.

However, the estate tax exemptions do not grow at the same rate. If the TCJA limits are made permanent, they would be roughly around $48M per person in 50 years, and if not, around $24M per person and $48M for the couple. That means the estate tax could be more than $15M if the limits are not extended.

Even if the limits are extended by the present President and the Congress, who favor it, tax laws change frequently, and it's impossible to predict with certainty what Congress will do over five decades.

A financial planner like me can evaluate if your estate will be subject to the estate taxes and if so, can help explore potential avenues to avoid or reduce the estate taxes.

Plan to Leave a Legacy

It is impossible for someone to plan to spend the last cent exactly when they die, since no one knows when they would die and how much they need till such time. So, either they have something to leave behind or they were broke and were dependent on others.

So, unless someone is broke, they leave a legacy. A legacy could be left not only to their loved ones but also to something that's dear to them. It could be a charitable organization or an alma mater or a religious institute or even their dear dog.

Broadly, there are two types of people, with regards to leaving a legacy.

- Those who want to leave something and plan for it while alive

- Those who have no special intention but leave whatever they couldn't consume during their lifetime

I have clients of both types, some who want to set aside certain amount or a property for their kids and others who think that they have provided proper education and support, and as long as they are not a financial burden on the kids, they are happy.

Irrespective of which type one belongs , having a financial plan helps.

If one wants to leave something, a) how much can they afford to leave? or b) if they have a set amount to leave, whether they can live off the remainder?

Even if one doesn't plan to leave something, do they have enough savings so that they are not a financial burden on others?

A financial planner like me can consider all the assets, liabilities, income, and expenses and project whether someone can meet their life goals and the intentions to leave a legacy.

Avoiding mistakes in retirement planning

Planning for retirement presents new challenges since it's an unknown territory and not everyone has the knowledge and experience to plan covering all bases.

Common mistakes in planning for retirement include

- underestimating living expenses
- underestimating tax liabilities
- underestimating medical expenses
- ignorance about RMDs
- concentrated investments in tax deferred accounts
- underestimating impact of inflation
- overestimating investment returns
- not considering the possible life expectancy
- not considering the potential reduced social security benefits

Avoiding these mistakes can make the retirement a more pleasant experience.

Unlike during working years, there is little time and scope to make adjustments if any mistakes were committed.

A financial planner like me can help to build a retirement plan, taking into consideration all the above factors, and build a plan that is more reliable than plunging into retirement without a plan.