The Big Number Myth

You've probably seen headlines claiming you need $1 million or more to retire. That number isn't wrong for everyone, but it's not universal either. Your retirement goal depends on your spending, your income sources, and your timeline.

Let's break it down with practical frameworks you can apply today.

Strategy 1: The 80% Replacement Rule

A common starting point: plan to replace 80% of your pre-retirement income each year.

Why 80% and not 100%? In retirement, certain expenses like commuting costs, payroll taxes, retirement contributions themselves will disappear. But others may increase, particularly healthcare.

Example: If your household earns $75,000/year, target roughly $60,000/year in retirement income from all sources combined.

Strategy 2: The 4% Rule

The 4% rule estimates how large your portfolio needs to be. The idea is simple: if you withdraw 4% of your savings in year one and adjust for inflation each year after, your portfolio should last roughly 30 years.

The Formula: Annual Need / 0.04 = Target Savings

• Annual retirement income needed: $60,000
• Minus Social Security (average benefit ~$25,000/year as of 2026): $35,000 gap
• $35,000 ÷ 0.04 = $875,000 in personal savings

That's a clearer, more personalized target than a generic $1 million headline.

Factor In What You Already Have

Before that number feels overwhelming, take stock of your existing resources:

• Social Security: Create an account at ssa.gov to see your projected benefit
• Employer Retirement Plans: 401(k), 403(b), or pension balances
• IRAs: Traditional and Roth IRA balances
• Other savings and investments: Brokerage accounts, real estate equity, HSAs
• Part-time income: Many retirees work part-time by choice, which dramatically reduces the savings needed

The Power of Starting Now

Compound interest is the single most powerful factor in retirement savings. The difference between starting at 25 versus 35 is dramatic.

Starting 10 years later requires more than double the monthly contribution to reach the same result.

Colorado Considerations

Living in Colorado comes with retirement planning advantages worth noting:

• Social Security benefits are fully exempt from state income tax for residents age 65+. Those ages 55–64 can exclude up to $20,000 (or the full amount if AGI is under $75K single / $95K joint)
• Pension and annuity income is fully deductible from Colorado state income tax starting in tax year 2026, regardless of age or amount (per SB25-136). Prior caps of $24,000 (age 65+) and $20,000 (ages 55–64) no longer apply
• Property tax exemptions are available to seniors age 65+ who have owned and occupied their home for 10+ years, exempting 50% of the first $200,000 in actual value (subject to state funding)
• Cost of living varies significantly. Denver metro vs. mountain towns vs. the Front Range each create different retirement budgets

Your Next Step: Open an IRA

If you don't already have an IRA, opening one is the single highest-impact action you can take today. An IRA gives you tax-advantaged growth independent of any employer plan — and you control it entirely. Climb offers both Traditional and Roth IRAs with competitive rates and the guidance of a local team that knows your financial picture. Whether you're just getting started or looking to consolidate old retirement accounts, we can help you find the right fit.

Quick Retirement Savings Checklist

• Estimate your annual retirement spending need (80% rule)
• Check your Social Security projection at ssa.gov
• Calculate your savings gap using the 4% rule
• Inventory all existing retirement accounts
• Open or contribute to an IRA
• Set up automatic monthly contributions
• Review and adjust annually

The best time to start saving for retirement was yesterday. The second best time is today. Wherever you are on the path, we’re here to help you take the next step.

Take control of your retirement.

Our IRA Savings Accounts and IRA CDs are tailored to help you on the path to a secure and prosperous retirement. Have peace of mind knowing you’re enjoying significant tax advantages as you save for later years. (We recommend consulting your tax professional.)

Visit climbcu.org/CDs-IRAs to learn more and open an account online.