Here's just how much money an average 25-year-old today will actually need by retirement

To reach retirement goals, young adults need to get cracking. A recent study from Wells Fargo found the typical millennial wants to retire by 59 — a tall order. That's almost a decade earlier than the full retirement age of 67, and today's retirees likely won't even live as long as millennials are predicted to.

Figuring out how much money you'll actually need to retire is no simple feat, and that's why there's a whole industry of financial planners and advisors to help you figure it out. Every generation also has their own advantages and disadvantages: For example, fewer than half of millennials said they planned to have children, in one 2012 study. Given how expensive kids are, skipping starting a family will presumably make saving for old age easier.

On the flip side, financial planners agree young workers can expect to receive less support from pensions or entitlements like Social Security. Then there's the pesky reality that people live longer as time goes on. As we advance toward the finish line, the finish line will keep moving. 

Luckily, if you're only 25 and you start saving now, you'll have a head start over your peers. That same Wells Fargo study found that only 41% of millennials up to age 35 have begun saving for retirement in earnest. 

An early start makes a huge difference: The bank projects that a 25-year-old with a starting salary of just $32,000 a year can get to $1 million by age 65 with a simple savings rate of 5% to start, and small savings rate bumps each year. 

But is that $1 million actually enough?

Is $1 million enough to retire on? 

The $1 million milestone is often used because it's a round, memorable number. Fidelity actually has a more modest projection, using the benchmark that you should have at least eight times your current salary saved by the traditional retirement age of 67. Using that rough formula, if you make about $50,000, you'll need a nest egg of only around $400,000. 

Of course, Fidelity makes their own set of assumptions, too, which may or may not apply to you. On the scarier end, retirement writer Robert Powell writes that, thanks to inflation, older millennials will need $1.8 million to retire — based on the assumption that they'll want between $30,000 and $40,000 a year in income. For younger millennials, that number might be as high as $2.5 million.

In short, $1 million might not be enough for you — but if you're already intimidated by how hard it feels to save, it's a reasonable bullseye to target.

What is the 4% rule?

One reason the spread of estimates is wide because no model uses the same set of assumptions for a hypothetical retiree. Even geographic distinctions can make a huge difference.

If you retire in South Dakota, for example, you'd need far less money to retire than someone in New York City or Miami. That's why a lot of financial planners use a slightly different way of trying to figure out how much money a given person will need, relying on something called the "annual withdrawal rate." 

The 4% rule — or the idea that you will draw down your nest egg by 4% of its initial value each year — comes from a famous study from researchers at Trinity University. They found that in a majority of scenarios (with varying time frames, portfolio allocations and stock market returns), if you pull out only 4% of your retirement account each year, the odds of you being able to make withdrawals for 30 years straight start to approach 100%.

The 4% rule can help you think through how much money you will really need: If you have $500,000 saved at retirement, for example, you can only afford to withdraw about $20,000 each year (plus small adjustments up for inflation).

Of course, economists have since questioned the wisdom of the 4% rule. All the models from the so-called Trinity Study used time-frames and stock market returns from the 20th Century, which was a special case for American savers. A century that doesn't see the United States emerging victorious from two major world wars and coming into its own economically won't necessarily be so good to savers. That's one reason retirement expert Wade Pfau told Barron's in 2015 that a 3% annual drawdown rate might be a safer way to tap your savings.

This all makes me sad. Any good news? 

Pumping up pay with raises — while pretending like you make way less when you decide how much to spend on rent and fun — will help you a lot, no matter how educated you are. After all, if you make $60,000, but spend like a person who makes only $30,000, you'll reach your retirement goals more easily.

Plus, remember that the 30-year window for retirement is perhaps a bit on the high end, assuming you retire at the typical age of 67 and then live until 97. That's a pretty long life! The Social Security Administration estimates that today's 25-year-olds will more likely live until about 82. 

To be fair, one problem is that many retirement assumptions give too little weight to gender: If you're a woman contending with a wage gap and a slightly longer lifespan, you might need to save even more than you realize. 

Then again, no matter who you are, there are other factors that could work in your favor. If you own a home (which builds equity), work longer or generate sources of side income, for example, you'll likely be better off in retirement.

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