The quick rule
Multiply your annual expenses by 25 to get your retirement number. Spend $40,000/year? You need about $1,000,000 invested.
The 4% rule and the 25x rule
They are two sides of the same coin. The 4% rule says you can withdraw about 4% of your portfolio in your first year of retirement, then adjust for inflation each year, with a high chance the money lasts 30+ years. Flip it around and 4% withdrawals mean you need 25 times your annual spending saved.
Your number by annual spending
Retirement number = annual spending × 25 (the 4% rule).
Start with spending, not income
Your number depends on what you will spend in retirement, not what you earn now. Many costs drop (commuting, saving for retirement itself, mortgage if paid off) while others rise (healthcare, travel). Estimate your future annual spending and multiply by 25.
How much to save each month
Thanks to compounding, the monthly amount is smaller than the total scares you into thinking. To reach $1,000,000 in 30 years at a 7% return, you need roughly $820/month. Start 10 years later and it jumps to about $1,900/month for the same goal — time is your biggest lever.
Do not forget inflation
A $1,000,000 goal in today's dollars will need to be larger in 30 years. At 3% inflation, $40,000 of spending today becomes about $97,000/year in 30 years. Our retirement calculator adjusts for this automatically.
Ways to reach your number faster
- Capture your full employer match — it is an instant 50–100% return.
- Increase your savings rate by 1% each year; you will barely notice it.
- Keep investment fees low; 1% in fees can cost you years of retirement.
- Avoid lifestyle creep — bank your raises instead of spending them.
What about retiring early?
The FIRE movement (Financial Independence, Retire Early) uses the same 25x math but demands a high savings rate — often 40–60% of income — to hit the number in 10–20 years instead of 40. See our financial freedom calculator to estimate your timeline.
Find your retirement number
Enter your age, savings and contributions to see if you are on track.
Frequently Asked Questions
How much do I need to retire at 65?
Multiply your expected annual spending by 25. If you will spend $50,000/year, aim for about $1.25 million. Adjust up for inflation and down for any pensions or Social Security you expect.
Is the 4% rule still safe?
It is a solid planning guideline based on decades of market history. Many retirees use a slightly more conservative 3.5% for extra safety, or stay flexible — spending a bit less in down years.
What if I start saving late?
You can still get there, but you will need to save more aggressively and possibly work a few extra years. Maximize employer matches and tax-advantaged accounts, and use our retirement calculator to find the monthly amount for your timeline.