How Much Money Do I Need to Retire? The Simple Formula

Multiply your desired annual retirement spending by 25. That is your retirement number. If you want to spend $50,000 per year: $1,250,000. At $60,000: $1,500,000. At $80,000: $2,000,000. At $100,000: $2,500,000. This formula is based on the 4% rule — you can safely withdraw 4% of your portfolio each year for 30 years without running out of money.

Social Security reduces the amount you need to save personally. The average Social Security benefit in 2026 is $1,970 per month ($23,640 per year). If you want $60,000 per year total and Social Security provides $24,000, you only need your portfolio to cover $36,000 per year. At 25x: $900,000 instead of $1,500,000. Check your estimated benefit at ssa.gov.

Why most people overestimate how much they need. The common fear is needing $3 to $5 million. In reality, most retirees spend less than during working years — no commute costs, no work clothes, no payroll taxes, no retirement contributions, and often a paid-off house. Many comfortable retirees live on $40,000 to $60,000 per year, requiring $1,000,000 to $1,500,000 plus Social Security.

The gap between where you are and where you need to be is fixable at any age with consistent investing. A 35-year-old with $50,000 saved investing $1,000/month at 7% reaches $1,500,000 by age 62. Use the [retirement gap calculator](/calculators/retirement-gap) to find your specific target and monthly savings needed. The [compound interest calculator](/calculators/compound-interest) shows how your savings grow. For detailed benchmarks, read our guide on [saving enough for retirement](/blog/saving-enough-for-retirement).

Frequently Asked Questions:

Is $1 million enough to retire? At the 4% rule, $1M provides $40,000/year. Combined with Social Security ($24K), total income is $64K — comfortable in most areas.

What if I want to retire early? For early retirement (before 60), use a 3.5% withdrawal rate instead of 4%, meaning you need approximately 29x annual spending.