How Much Do I Need to Retire? A 4-Step Estimate

Published October 11, 2026

Free tool: Retirement Calculator→

"How much do I need to retire?" has no single answer, because it depends on how you want to live, when you stop working and what other income you'll have. But you can get a solid estimate in four steps, and then check whether your current savings plan will get you there. This guide walks through the steps with an example, using the free Retirement Calculator for the projections.

Step 1: Estimate your spending in retirement

Start with what you'll spend each year, in today's dollars. Two ways to estimate it:

• The rule of thumb: many planners suggest about 70% to 80% of your pre-retirement income, because some costs fall away (commuting, work clothes, saving for retirement itself) while others, such as healthcare and travel, can rise.
• A retirement budget: list the costs you expect, from housing and food to healthcare, travel and hobbies. If your mortgage will be paid off by then, leave it out. The Budget Calculator can help you sort the categories.

Example: you expect to spend $60,000 a year in today's dollars.

Step 2: Subtract your guaranteed income

Most people won't fund retirement from savings alone. Subtract income you can count on, such as Social Security and any pension. In the US, you can see your personal Social Security estimate by creating an account at ssa.gov.

Example: you expect about $24,000 a year from Social Security, so your savings need to provide $36,000 a year.

Step 3: Multiply the gap by 25

A widely used guideline, the 4% rule, says you can withdraw about 4% of your savings in the first year of retirement, then raise the amount with inflation each year, with a good chance of the money lasting 30 years. It comes from studies of historical US stock and bond returns. Flip it around and you need about 25 times your yearly gap:

• $36,000 × 25 = $900,000, in today's dollars

If you plan to retire early, and so need your money to last 40 years or more, many people aim lower, at 3% to 3.5%, which means 29 to 33 times your yearly gap.

Step 4: Check whether you're on track

Now project what your savings will grow to. Say you're 30 with $50,000 saved, you invest $1,000 a month until 65, and your investments earn 7% a year. The Retirement Calculator gives:

• $2,376,362 at 65, of which $470,000 is your own money and the rest growth
• $1,001,330 in today's dollars, assuming 2.5% inflation

That's above the $900,000 target, so this plan is on track. Remember to compare the inflation-adjusted figure with a target in today's dollars; $2.4 million in 35 years won't buy what $2.4 million buys now.

Starting later makes a big difference. The same $50,000 and $1,000 a month starting at 40 grows to about $1,096,000 by 65, which is only about $591,000 in today's dollars. To reach the $900,000 target from age 40, you'd need to save about $1,710 a month. The Compound Interest Calculator shows why the early years matter so much.

How to use the Retirement Calculator

1. Open the Retirement Calculator.
2. Enter your ages: your current age, the age you plan to retire and a life expectancy to plan for. Planning to 90 or 95 is sensible, since many people live longer than the average.
3. Enter your savings: what you have now and what you'll add each month.
4. Choose your assumptions: the annual return before retirement, the return during retirement (usually lower, as portfolios become more conservative), and inflation.
5. Enter the monthly income you'll draw in retirement. The calculator takes this amount out of your savings every month and doesn't raise it with inflation, so enter it in future dollars. At 2.5% inflation, $4,000 a month in today's money becomes about $9,500 a month in 35 years.
6. Read the results: your balance at retirement, the same balance in today's dollars, the interest earned, and how many years your savings will cover. The charts show your savings growing until retirement and then being drawn down.

If the years of coverage end before your life expectancy, try saving more, retiring a little later, or planning to withdraw less.

Ways to close a gap

• Save more, starting now. Even small increases compound over decades; put part of every raise toward retirement.
• Use tax-advantaged accounts. Contributions to a 401(k) or IRA grow tax-deferred or tax-free; see the 401(k) Calculator and the Roth IRA Calculator.
• Get the full employer match. It's part of your pay, and it's the best return available.
• Work a little longer. Each extra year adds contributions and growth, and means one less year of withdrawals. Delaying Social Security also raises your benefit.
• Keep fees low. A 1% annual fee can cost a quarter of your final balance over 30 years.

Frequently asked questions

How much do I need to retire?

Roughly 25 times the yearly amount your savings must provide after Social Security and pensions. If you need $36,000 a year from savings, that's about $900,000 in today's dollars.

What is the 4% rule?

A guideline that withdrawing 4% of your savings in the first year of retirement, and then the same amount adjusted for inflation each year, has historically lasted about 30 years. It's a starting point, not a guarantee; markets, fees and your retirement length all matter.

What return should I assume?

Use a cautious figure. Many planners use around 5% to 7% a year before inflation for a stock-heavy portfolio and less for bonds and cash. Running the calculator with a lower return shows how much margin you have.