How much money do you need to retire? Why advisers say there's no magic number

Employees may be looking for a magic formula for the perfect time to retire, but they'll be hard-pressed to find it. 

"People think about retirement and they say, I want to retire at 65, or I want to make a million dollars, but they have no idea how much money they need to make," says Denny Artache, president and CEO of financial advisory Artache Financial. "It takes planning and realistic expectations." 

Sixty-nine percent of Americans retire by age 66, according to the Life Insurance and Market Research Association. Fifty-one percent retire between 61 and 65, and 89% have retired by 75. However, more than half of Americans now plan to work longer to save more for retirement, and 41% say it will "take a miracle" to be financially secure, according to data from the Natixis Global Retirement Index. 

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While it's tempting to have a number in mind, it will mean nothing without the proper planning, which needs to be done years and even decades ahead of time, Artache says. Considering factors like Social Security payments, pensions and stock market returns should all be factored into a long-term retirement plan. 

"There's no direct rule that you need to put 30% of your income away to have a successful retirement, because at the end of the day, if you have too much debt or obligations, how can you invest for your retirement?" he says. "A lot of people say, 'What's my number? I need a million. I need two million.' They base that off of what they can make on the stock market and then withdraw for the rest of their life. But the market has been down and we don't know what the future holds. Inflation is crazy." 

The planning should start today, by establishing healthy financial habits like paying yourself first and investing into a workplace retirement account. Artache also recommends being prudent with spending and avoiding debt. 

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Artache compares financial planning to diet and exercise — while he would like to eat pizza every day, he also wants to stay in shape and live a healthy lifestyle. The same principles can be applied to financial wellness, too. 

"It starts with being on a budget and not spending too much on a monthly basis. And it's not fun, it's not exciting," he says. "That's the deal with retirement planning — you can control your investments and how they grow, but you also have to control your behavior." 

While each individual's financial situation is unique, Artache does offer some guidelines for savers. He advises people to put aside 20% of their assets as cash for unexpected expenses that could prevent them from saving for retirement if something comes up, like a car repair or home expenses. Employees should also get into the habit of saving a few hundred dollars out of every paycheck into a retirement account, as early in their career as they can. 

"Keep your debt low. Invest in yourself like clockwork," Artache says. "If you can't make ends meet while you're working, what makes you think you'll make it work in retirement? If you don't start to have it now, you're not going to have it when you retire."