How Much Money Do You Need to Retire?

The simplest framework: 25× annual expenses

If you spend $50,000/year in retirement, aim for $1.25 million invested. If you spend $80,000/year, aim for $2 million. If you spend $30,000/year, $750,000 is enough. The number scales with how you actually live.

This is derived from the 4% rule: in retirement you can safely withdraw about 4% of your portfolio each year, adjusted for inflation, with a high probability of the money lasting 30+ years.

Targets by retirement lifestyle

• Lean retirement ($30–40K/year spending): $750K–$1M needed
• Comfortable retirement ($50–60K/year): $1.25M–$1.5M needed
• Mid-upper retirement ($80K/year): $2M needed
• Luxury retirement ($120K+/year): $3M+ needed

Most middle-class US retirees fall in the $50K–$80K/year range when housing is paid off and Medicare reduces health costs.

Don't forget Social Security and pensions

Most people don't fund all their retirement from savings:

• Average Social Security benefit (2026): ~$1,900/month or $22,800/year
• Two-earner household: ~$45,000/year combined
• If your retirement spending is $60K and Social Security covers $30K, you only need to fund the other $30K from savings — meaning $750K instead of $1.5M

Three real scenarios

Scenario 1 — Modest spender, paid-off home

$45K/year spending. Social Security covers $25K. Need $20K/year from savings → $500,000 invested. Doable for many disciplined savers by age 60.

Scenario 2 — Comfortable middle-class

$70K/year spending. Social Security covers $30K. Need $40K/year from savings → $1 million invested. The classic 'millionaire retirement' target.

Scenario 3 — Higher spending, early retirement

$80K/year spending, retiring at 55 (no Social Security yet). Need $80K/year for 10 years from cash + bonds, then $50K/year after Social Security kicks in. Total target: ~$2 million.

How to figure out YOUR number

1. Track your current annual expenses for 6–12 months
2. Adjust: subtract mortgage if it'll be paid off, add healthcare costs
3. Estimate Social Security at ssa.gov (use the 'my Social Security' tool)
4. Subtract Social Security from your annual expenses
5. Multiply that gap by 25 — that's your retirement target

How long it takes to get there

Reaching $1 million from $0:

• $500/month at 7% → 36 years
• $1,000/month at 7% → 28 years
• $2,000/month at 7% → 21 years
• $3,000/month at 7% → 17 years

Common retirement planning mistakes

• Planning around income instead of expenses
• Underestimating healthcare costs (Medicare doesn't cover everything)
• Forgetting taxes — 401(k) withdrawals are taxable income
• Being too conservative too early — needing growth for 25+ year retirement
• Ignoring Social Security in calculations (it covers 30–50% for most retirees)

Use the calculator