How Much Do You Need to Retire? Rules, Formulas & Examples
Learn how to calculate your retirement number using the 25x rule, 4% withdrawal rate, and age-based benchmarks.
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Key Takeaways
- 1Multiply annual spending by 25 for a starting nest-egg target (4% rule).
- 2Subtract Social Security and pensions before applying the 25x rule.
- 3Fidelity benchmarks: 1x salary by 30, 3x by 40, 6x by 50, 8x by 60.
- 4Healthcare costs can add $5,000–$15,000/year — build a buffer.
The most common retirement question is deceptively simple: how much money do I need? The answer depends on your desired lifestyle, other income sources like Social Security, and how long you expect to live.
Use our retirement calculator to model your specific age, savings rate, and expected returns.
The 25x Rule and 4% Withdrawal Rate
Multiply your desired annual retirement income by 25. This is based on the 4% rule: withdrawing 4% of your portfolio in year one, then adjusting for inflation.
Example: if you need $70,000 per year from investments, target roughly $1,750,000. See our guide on retirement withdrawal order for tax-efficient drawdown strategies.
Age-Based Savings Benchmarks
Fidelity suggests saving 1x your salary by 30, 3x by 40, 6x by 50, and 10x by 67. These are guidelines — high earners in expensive cities may need more.
Starting late is not hopeless. Increasing contributions by $200/month or working two extra years can dramatically close a savings gap.
Don't Forget Other Income
Social Security, pensions, and part-time work reduce how much you must save. Check your SSA.gov estimate before applying the 25x rule.
Pair retirement savings with smart account placement — read 401(k) vs IRA for the optimal funding order.
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