How much money do I need to retire?

A common rule is to save 25× your annual expenses (the 4% rule). If you spend $50,000/year, you need $1,250,000. With Social Security covering $20,000/year, you need 25 × $30,000 = $750,000 in savings. The exact amount depends on retirement age, lifestyle, healthcare costs, and life expectancy.

How much should I save for retirement each month?

Financial advisors recommend saving 15-20% of gross income for retirement. A 25-year-old earning $55,000 should save $688-917/month. Starting at 35, you need $1,100-1,500/month. Starting at 45, you need $2,200-3,000/month. The earlier you start, the less you need to save thanks to compound interest.

🏖️ Retirement Planning

Retirement Calculator

How much do you need to retire? Find out in 30 seconds.

💡 Quick Answer: The 4% rule says you need 25× your annual expenses saved. Spending $50K/year? You need $1.25M. With Social Security covering $20K, you need $750K. A 30-year-old saving $500/month at 7% return will have $567K by age 65.

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The 4% Rule Explained

The 4% rule, developed by financial planner William Bengen in 1994, states that retirees can withdraw 4% of their portfolio in the first year of retirement, then adjust for inflation each year after. This strategy historically survived 30 years of retirement in 95% of all historical market periods tested, including the Great Depression and 2008 financial crisis. To use the 4% rule: divide your annual expenses by 0.04 to get your target retirement savings. If you need $40,000/year from savings (after Social Security), you need $40,000 ÷ 0.04 = $1,000,000. Some modern advisors suggest a 3.5% rule for more conservative planning, especially given longer life expectancies.

How Compound Interest Supercharges Retirement Savings

Starting early is the single most powerful retirement strategy. A 25-year-old investing $300/month at 7% return will have $948,000 at age 65 — from just $144,000 in total contributions. A 35-year-old investing the same $300/month will have only $453,000 at 65. Starting 10 years later means you accumulate less than half, despite contributing $108,000. Each decade of delay roughly requires doubling your monthly contribution to reach the same goal. The math is clear: time in the market beats timing the market, and starting today beats starting "when you have more money."

Retirement Savings by Age: Are You On Track?

Financial experts suggest these milestones: by age 30, save 1× your salary. By 40, save 3× your salary. By 50, save 6× your salary. By 60, save 8× your salary. By 67, save 10× your salary. If you earn $55,000, you should have $55,000 saved by 30, $165,000 by 40, $330,000 by 50, $440,000 by 60, and $550,000 by 67. If you are behind, increase your savings rate, delay retirement by 2-3 years (which has a massive compound effect), or both.

Disclaimer: This calculator provides estimates for educational purposes only. Actual retirement needs depend on healthcare costs, market performance, tax situations, and individual circumstances. Consult a certified financial planner for personalized retirement planning.

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