The $118,000 Retirement Blueprint No One Talks About

We’ve all heard it—on TV, from financial advisors, across the internet: If you don’t have a million dollars (or more), you can’t retire safely in America. For decades, the number haunted every planning spreadsheet and lunchroom conversation. But what if that number was always built on the wrong math?

Here’s the truth almost nobody shares: Most retirees don’t need a massive, seven-figure portfolio to achieve security. They need predictable, steady income—the kind that keeps the lights on, pays for groceries, covers those doctor bills, and leaves a little for real life.

Retirement isn’t a race to stack the biggest account, but a transition to a life where freedom isn’t measured by your balance, but by the reliability of your monthly deposits. And the best-kept secret is this: You may need far less than you think.

The Shift — From Growth to Income

Think about the traditional model: Work for decades, funnel your savings into 401(k)s and IRAs, chase growth through stocks and mutual funds, and hope that the market’s wild ride leaves you enough to live on. For most, it means anxiously watching balances and praying that a bad year doesn’t hijack your farewell tour.

But a new generation of retirees—especially those who weathered the volatility of the 2000s and 2020s—are flipping the script. They’re adopting the “income-first” model: Instead of chasing endless capital appreciation, they focus on deploying their capital to produce recurring, reliable cash flow.

How? By choosing investments that pay you—monthly, quarterly, or even weekly—like clockwork. These include certain real estate trusts, business development companies, preferred stocks, covered call funds, and alternative yield assets.
This approach isn’t about swinging for the fences, but about putting each dollar to work with the mission of generating a steady paycheck long after the office goodbyes.

The Math — Why $118,000 Works

Let’s break it down simply. The average American retiree spends about $3,000–$4,000 a month on living expenses:

• Housing (rent/mortgage/taxes): $1,000–$1,200
• Food and basic needs: $700–$900
• Health insurance and out-of-pockets: $500–$700
• Utilities, transportation, and extras: $800–$1,200

Total: about $36,000–$48,000 a year.

The old “4% rule” said you could withdraw 4% of your savings per year without running out of money. To generate $40,000 a year in traditional withdrawals, you’d need a full $1 million.

But what if your money generated consistent yield—say 8–10% a year—from well-chosen income vehicles?
Suddenly, $118,000 invested at 10% annual yield produces:

• $11,800 per year
• $983 per month (often paid out in distributions, not just “paper gains”)

Couple this “second paycheck” with Social Security, a modest pension, or part-time income, and you’re in the range of a full lifestyle—without burning through the principal.

Is it “magic”? Not at all.
It’s just math—math the industry hopes you never check, because it means you’re no longer dependent on endless management fees and complicated drawdown games.

What the Experts Say (Tim Plaehn’s Case Study)

This smarter approach isn’t just a quirky blog theory. Analyst Tim Plaehn has built a whole practice proving that income-focused portfolios can provide real, sustainable retirement for far less money than Wall Street wants you to believe.

Plaehn’s popular model portfolios pinpoint accessible, high-yield assets that can be owned inside IRAs or regular accounts—often held by real companies, not just speculative ventures. He’s shared case studies where retirees, with as little as $118,000, can construct portfolios designed to pay $3,000–$4,000 a month when paired with Social Security or other modest streams.

The strategy isn’t “get rich quick.” It’s “live well reliably.” It’s the power of compounding income and reliability over gambling for the next bull market.

The Real Question — What Do You Want from Retirement?

Ask yourself: What do you really want from retirement?

• Are you hoping to be the richest person in your zip code?
• Or do you want the fridge full, the bills covered, maybe a dinner out, and the stress dialed all the way down?

Is your dream to chase numbers on a screen, or to finally own your days?

The “million-dollar myth” feeds anxiety. But the income-first approach builds peace of mind. It rewards calm management over bravado, and, yes, sometimes working with a trustworthy guide—like Plaehn or one of his peers—who doesn’t get paid more when you roll the dice.

Before you assume you need seven figures to retire, take a quiet look at the plan thousands of Americans are now adopting. See the numbers, hear the stories, and realize what’s possible when you build toward steady income—not just endless growth.

Don’t let old math steal your dreams—or saddle you with sleepless nights watching the Dow.

—

Claire West