The amount of savings American workers believe they need to retire comfortably has surpassed a million dollars and it keeps rising, but one advisor says it's a mistake to focus on just those numbers.

“It’s not about saving a certain amount,”  said Gaby Cheng Mechem, founder and CEO of NIM Retirement Group, an independent retirement financial services firm based in Irvine, Calif., that is dedicated to helping individuals create retirement strategies that suit their unique needs and objectives.

Mechem said that her firm has clients who have $500,000 in savings and clients with $50 million to $60 million in net worth. 

“They all can retire," she said. "It depends on how their lifestyle is, how they are managing their resources, what kinds of dreams and desires they need to fulfill."

The latest retirement survey in June by Northwestern Mutual puts the amount at $1.27 million. Last year, it was slightly below, at $1.25 million.

A separate retirement readiness survey in May 2022 by Schroders also placed the number above $1 million.

Mechem, however, said people just putting a number to how much they need to retire is the wrong approach. That, she said, also goes for custodians who say, “Oh, here is your trajectory. If you reach this goal, you will be on the right track." When people do that, they don’t even have a customized foundation or a system to ensure that will happen, she saaid, noting that a market crash or a downturn could easily take away 30% to 40% of that goal.

Mechem said her team focuses on an overall retirement planning strategy that is comprehensive. It’s not just enough for people to say, “Well, I have a 401(k) or if I reach the $2 million or $3 million savings mark then I could simply retire,” she said. “In our minds, that’s not the case because many things can tear apart that retirement.” 

At NIM Retirement Group, Mechem said they view retirement planning “more like a well-oiled machine, meaning that there are so many different pieces of gear in this machine that need to turn in the same direction before it can really function well."

Her team, she said, specializes in helping individuals who have retirement savings, especially those who have worked for a company for more than 20 years. “All they know is to contribute to that 401(k),” she said. But the team focuses on a customized approach, looking at how that 401(k) is performing and how the client can transform it into a retirement plan. And on top of that, they also closely look at Social Security maximization, long term protection, tax reduction and legacy planning, she said.

As a result, Mechem said each individual retirement plan will be unique because each client has different needs and different wants and different resources. “What we do is help our clients understand their own needs and reevaluate their resources and find efficiencies to make sure their  resources are matching where they want to be in their retirement,” she said.

Mechem said taxes are one area that is emphasized in facilitating their clients’ wish, because “people focus on growth but overlook tax efficiency in our country.” Income, she noted, is another area she emphasizes with clients because “when you retire, your paycheck will go away but that property bill is still going to be here every year.” Generating stable monthly income is important, and whether that comes from rental property, dividend stocks, bridge loans that they manage or even annuities, income is looked at first, she said.

It comes down to how much money you need to pay bills and how much money you want to spend on fun every month, Mechem said. “After that, however we invest, that’s icing on the cake and you can take care of everything else,” she said.