How Much Do You Need to Retire? The Real Number

The 4% Rule Starting Point

The 4% rule says you can withdraw 4% of your portfolio in year one of retirement, adjust for inflation each year, and your money should last 30+ years. This means you need 25x your annual expenses.

If you spend $50,000/year: target $1,250,000.
If you spend $80,000/year: target $2,000,000.

What the 4% Rule Does Not Account For

• •
• •Sequence of returns risk (retiring into a bear market is dangerous)
• •Very long retirements (40+ years if you retire early)
• •Social Security income (which reduces how much your portfolio must cover)
• •Unexpected medical costs

  A More Conservative Approach

  Many financial planners now suggest 3–3.5% withdrawal rates for early retirees. At 3%, you need 33x your expenses.

  Income Sources Matter

  Social Security reduces the burden on your portfolio significantly. A couple receiving $40,000/year in Social Security needs $40,000 less annually from investments.

  How to Calculate Your Number

  1. 1.
  2. 2.Estimate annual retirement spending (today's dollars, adjusted for inflation)
  3. 3.Subtract guaranteed income (Social Security, pension)
  4. 4.Multiply the remainder by 25 (4% rule) or 33 (3% rule)

     Conclusion

     Your retirement number is personal. Calculate it based on your actual expected spending — not a generic rule of thumb. Use our FIRE Number Calculator to run your numbers.