How Much Money Do You Actually Need to Retire?

Start with your annual spending

Retirement planning works backward from how much you want to spend each year, not how much you earn. If you expect to spend $60,000 a year in retirement, that number drives everything else.

The 25x rule (and the 4% rule behind it)

A widely used guideline says you need about 25 times your annual expenses invested to retire comfortably. That comes from the 4% rule: withdrawing 4% of your portfolio in the first year (then adjusting for inflation) has historically lasted 30+ years.

For $60,000/year of spending, that's a target of roughly $1.5 million. Social Security or a pension reduces how much of that you personally need to fund.

Your savings rate matters more than your salary

The single biggest lever is the percentage of income you save. Someone saving 20% of their income reaches financial independence far sooner than someone earning more but saving 5%. Automate contributions and increase them with every raise.

Run your own number

Use our Retirement Calculator to project your balance at your target age, and the 401(k) Calculator to see how employer matching accelerates it. The Compound Interest Calculator shows why starting even a few years earlier makes a dramatic difference.