How Much Money Do You Need to Retire?
The simplest answer: aim for about 25 times your annual spending. Plan to spend $60,000 a year in retirement, and your target is roughly $1.5 million — before Social Security, which lowers what you personally need to save. Here's how the 4% rule and 25x rule work, plus savings targets by age and by spending level so you can find your own number. More in our Personal Finance Statistics Hub →
The 4% Rule and the 25x Rule
These two rules are the same idea from opposite directions. The 4% rule says you can withdraw about 4% of your portfolio in your first year of retirement, adjust that dollar amount for inflation each year after, and historically the money lasted at least 30 years in most market scenarios. Flip it around and you get the 25x rule: because 4% is one twenty-fifth, you need roughly 25 times your annual spending saved.
Both are planning guidelines, not guarantees. Market crashes early in retirement, unusually long lifespans, and big health costs can all change the math — but 25x is a solid starting target.
How Much You Need by Spending Level
| Annual Spending | Nest Egg Needed (25x) | Annual Withdrawal (4%) |
|---|---|---|
| $40,000 | $1,000,000 | $40,000 |
| $50,000 | $1,250,000 | $50,000 |
| $60,000 | $1,500,000 | $60,000 |
| $80,000 | $2,000,000 | $80,000 |
| $100,000 | $2,500,000 | $100,000 |
Based on the 25x / 4% rule. These are portfolio targets before Social Security or pension income, which reduce how much you personally need to save.
Savings Targets by Age
A widely cited benchmark from Fidelity gives you a running checkpoint based on multiples of your salary:
Fidelity retirement savings guidelines. Someone earning $70,000 would target ~$70,000 saved by 30 and ~$700,000 by 67. Guideposts, not guarantees.
📌 Key Insight
Don't forget Social Security. If your target is $60,000/year of spending (a $1.5M nest egg) and Social Security covers $24,000 of it, you only need your portfolio to produce the remaining $36,000 — about $900,000, not $1.5M. Estimating your benefit at ssa.gov is one of the highest-value hours in retirement planning because it can cut your personal savings target by hundreds of thousands.
How to Hit Your Number
- Capture your full employer 401(k) match — it's an instant 50–100% return you can't beat elsewhere.
- Automate contributions and increase them 1% each year or with every raise.
- Use tax-advantaged accounts first (401(k), IRA, Roth) before a regular brokerage.
- Start early — thanks to compounding, money invested in your 20s and 30s does far more heavy lifting than money added near retirement.
Start Building Your Nest Egg
New to investing? Our beginner's guide walks you through opening an account and getting your first dollars into the market.
How to Start Investing → Best Investing AppsFrequently Asked Questions
About 25 times your annual spending. Plan to spend $60,000/year and you'd target ~$1.5 million — before Social Security and pensions, which reduce how much you personally need to save.
Withdraw ~4% of your portfolio in year one, adjust for inflation each year after, and historically the money lasted 30+ years in most scenarios. It's the flip side of the 25x rule.
A common Fidelity benchmark: 1x salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Someone earning $70,000 would aim for ~$700,000 by 67.
About $1.5 million using the 25x rule. If Social Security covers $24,000 of that spending, your portfolio only needs to fund the remaining $36,000 — around $900,000.
Often, yes. At 4%, $1 million supports about $40,000/year from your portfolio, plus Social Security. Whether it's enough depends on your spending, location, and how long your retirement lasts.