Retirement planning requires knowing how much money you need at age 65–67 to fund 30 years without work. The 4% rule is the industry standard: withdraw 4% of your portfolio annually, adjusted for inflation, and your money lasts through age 95–100. This calculator shows your exact number (usually 20–25x your annual spending), accounts for compound interest growth, Social Security income, and calculates your required monthly savings to hit your target.
Retirement Calculator
Calculate how much money you need to retire using the 4% rule. Account for Social Security benefits and determine your monthly savings target.
How Retirement Needs Are Calculated
The 4% rule uses historical data: if you withdraw 4% of your portfolio in year 1 (adjusted for inflation annually), you have a 90%+ success rate of not running out of money for 30+ years. This rule assumes a 60/40 stock/bond allocation with 7% average returns. To calculate your target: multiply your annual spending need by 25. If you spend $60,000/year, you need $1.5M.
| Variable | Definition |
|---|---|
| Portfolio | Total investment balance needed at retirement |
| Spending | Your annual expenses in retirement (adjusted for inflation) |
| 4% Rule | Withdrawal rate: take 4% year 1, adjust up for inflation annually |
| 25x Multiple | The inverse of 4% ($1M ÷ 0.04 = $25M needed for $1M income) |
Example: You need $60,000/year to live. Using the 4% rule, you need $1.5M. With Social Security providing $30,000/year, you only need $30,000 from portfolio withdrawals, requiring $750,000 total. This calculator works backwards from your target and shows exactly how much to save monthly to hit it.
⚠️ Expert Pro-Tip
The Sequence-of-Returns Problem: A $1M Portfolio Is Not Guaranteed: The 4% rule works if markets average 7% annually over 30 years. But if markets crash 20% in year 1 of retirement (like 2008 or 2022), and you withdraw $40k anyway, you're withdrawing from a $800k portfolio — 5% of remaining balance. That accelerates portfolio decline. The fix: keep 2–3 years of expenses in cash/bonds, withdraw from bonds in down years, stocks in up years. A $1M portfolio with $60k annual spending needs $120–180k in bonds. This "bucket strategy" means bad years don't force you to sell stocks at losses.
Retirement Planning FAQ
How much Social Security will I get in 2026?
Average Social Security benefit in 2026: ~$1,907/month (~$22,884/year) at full retirement age (67 for those born 1960+). This varies by lifetime earnings — high earners get $3,600+/month, low earners ~$1,000/month. You can claim at 62 (reduced 30%), 67 (full), or 70 (delayed 24%). Delaying to 70 increases your benefit 8%/year. On average, break-even is around age 80 — if you live past 80, delay. If you're unhealthy, claim early. This calculator accounts for whatever you estimate your benefit to be.
What about inflation — won't I need more than $60k/year in 30 years?
Yes, but the 4% rule already accounts for it. You withdraw 4% year 1, but that withdrawal amount increases by inflation each year. At 3% inflation, your $60k withdrawal becomes ~$145k by year 30 (in nominal dollars), but your 7% portfolio returns also keep pace. The math works because portfolio growth (7%) outpaces inflation (3%) plus withdrawals (4%).
Is $1.5M enough to retire, or do I need more?
The 4% rule says $1.5M safely withdraws $60k/year for 30 years with 90% confidence. But if markets underperform (5% vs. 7%), or you live to 95 (35 years), you might run out. Conservative adjustment: use a 3% withdrawal rate instead (need $2M for $60k spending). Aggressive adjustment: use 5% if you're willing to cut spending 10% in down markets. Most people are comfortable with 4%; pick 3% if you're risk-averse or retiring early (40s/50s).
What's the best way to save for retirement?
Maximize tax-deferred accounts first: 401(k) up to match (usually 3–6%), then Roth IRA to $7,000/year (2026 limit), then back to 401(k) up to $69,000/year (2026 limit). Only after maxing these use taxable brokerage. 401(k) contributions reduce your taxable income; Roth grows tax-free. Self-employed? Use a Solo 401(k) or SEP-IRA (can contribute 20% of income, up to $69,000/year). The power is tax deferral — $10k at 7% annual returns grows to $76,100 in 30 years tax-free, but only $54,300 in a taxable account (after 20% capital gains tax annually). Start now; time is your biggest advantage.
Should I retire early (at 55 or 60)?
Early retirement (before 65) requires: (1) Enough savings to cover gap to 65, (2) No employer health insurance (health insurance costs $400–800/month before Medicare at 65), (3) Discipline not to spend more in 30 years than you saved. The penalty: retiring at 55 vs. 67 means 12 more years of withdrawals on same portfolio — you need 20–30% MORE savings. Use this calculator with an early retirement age and see your target; most people find they need to work 5 more years than they expected.
What if I want to retire overseas (cheaper living)?
If your target spending is $60k but you can live on $30k overseas, you need $750k instead of $1.5M. This is the fastest path to early retirement. Popular low-cost countries in 2026: Mexico ($20–25k/year), Portugal ($25–30k/year), Costa Rica ($25–35k/year), Colombia ($15–20k/year). Risks: currency fluctuations, healthcare quality, visa requirements. Many people underestimate overseas living costs (healthcare, travel, social activities raise budgets). Plan conservatively; retiring with $300k less buffer is risky.