Guide
How much do I need to retire?
Rules of thumb get you a ballpark. Your actual number depends on your spending, your taxes, and when your income sources switch on.
Updated July 11, 2026
The rule-of-thumb starting point
The best-known shortcut is the 4% rule: multiply your annual spending by 25. Spend $60,000 a year and it suggests a $1.5 million portfolio. It's a useful first estimate drawn from historical U.S. market data.
But it assumes a fixed 30-year horizon, ignores taxes, and treats Social Security and pensions as afterthoughts. Your situation rarely matches those assumptions.
Why taxes change the target
A dollar in a traditional 401(k) isn't a dollar of spendable income — you owe ordinary tax when you withdraw it. A dollar in a Roth is spendable; a dollar in a taxable account owes tax only on its gains. Two people with the same balance can need very different totals depending on where their money sits.
Required minimum distributions and Social Security taxation shift the number again once you're retired. A projection that nets taxes each year gives you a target you can actually spend against.
From a number to a plan
Instead of solving for one magic figure, model the whole life: your accounts, income, and expenses, year by year, and check the probability the plan lasts. The “number” falls out of a plan that survives — and you can see exactly which levers change it.
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Frequently asked
- Is the 4% rule still accurate?
- It's a reasonable starting estimate, but it ignores taxes, flexible spending, and your specific income timing. Use it to get in the right ballpark, then refine with a full projection.
- Does Social Security reduce how much I need to save?
- Usually, yes — it's inflation-adjusted lifetime income that covers part of your spending, so the portfolio only has to fund the gap. Its taxation and claiming age both affect the math.