Three proven methods to find your personal retirement number — with 2025 data and a free calculator.
The most widely used rule: multiply your expected annual retirement spending by 25. If you plan to spend $70,000 per year in retirement, your target is $1,750,000. This is the "25x rule," derived from the 4% safe withdrawal rate. Scroll down for the full framework, a free calculator, and adjustments for your specific situation.
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No single formula works for everyone. Here are the three most widely used approaches, their strengths, and their limits.
Multiply your expected annual retirement spending by 25. This is simply the mathematical inverse of the 4% withdrawal rate. If your portfolio is 25x your annual expenses, you can theoretically withdraw 4% per year indefinitely.
| Annual Spending in Retirement | 25x Target | Monthly Withdrawal at 4% |
|---|---|---|
| $40,000 | $1,000,000 | $3,333 |
| $60,000 | $1,500,000 | $5,000 |
| $80,000 | $2,000,000 | $6,667 |
| $100,000 | $2,500,000 | $8,333 |
| $120,000 | $3,000,000 | $10,000 |
| $150,000 | $3,750,000 | $12,500 |
Most financial planners use a target of replacing 70–90% of your pre-retirement income. The logic: in retirement you no longer pay payroll taxes, you're not saving 10–15% of income, and work-related expenses disappear. A $120,000 earner targeting 80% replacement needs $96,000 per year from all sources.
Build a line-by-line retirement budget. This takes more work but produces the most accurate number. Common categories to include: housing, healthcare (the #1 underestimated expense), food, transportation, travel/leisure, insurance, and taxes on withdrawals.
Your retirement number drops significantly when you factor in Social Security. The average Social Security retirement benefit in 2025 is approximately $1,907/month ($22,884/year). For a married couple where both spouses claim, the combined benefit can be $40,000–$60,000+ per year.
| Your SS Benefit | Annual SS Income | Reduction in Portfolio Needed (25x) |
|---|---|---|
| $1,500/mo | $18,000/yr | −$450,000 |
| $2,000/mo | $24,000/yr | −$600,000 |
| $2,500/mo | $30,000/yr | −$750,000 |
| $3,000/mo | $36,000/yr | −$900,000 |
This is why claiming Social Security at 70 instead of 62 — which increases your benefit by up to 77% — can reduce the portfolio you need to accumulate by $500,000 or more.
The 4% rule was designed for a 30-year retirement. If you retire at 55, you may have a 35–40 year retirement. Many researchers suggest 3.3–3.5% as a safer withdrawal rate for early retirees, which means a 28–30x multiplier instead of 25x.
A shorter retirement horizon allows a slightly higher withdrawal rate. At 70 with a 20-year horizon, a 5% rate has historically worked well — meaning a 20x multiplier may be sufficient.
Add $150,000–$300,000 to your target if you have chronic conditions, no employer retiree health coverage, or plan to retire before Medicare at 65.
These are Fidelity's widely cited targets, assuming a 15% savings rate starting at 25 and a retirement at 67:
| Age | Target Savings (× Final Salary) | Example: $100K Salary |
|---|---|---|
| 30 | 1× | $100,000 |
| 35 | 2× | $200,000 |
| 40 | 3× | $300,000 |
| 45 | 4× | $400,000 |
| 50 | 6× | $600,000 |
| 55 | 7× | $700,000 |
| 60 | 8× | $800,000 |
| 67 | 10× | $1,000,000 |
How fast you can reach your retirement number depends on how aggressively you can save. The 2025 annual limits:
| Account Type | Under 50 | Age 50–59 / 64+ | Age 60–63 (SECURE 2.0) |
|---|---|---|---|
| 401(k) / 403(b) | $23,500 | $31,000 | $34,750 |
| IRA (Traditional or Roth) | $7,000 | $8,000 | $8,000 |
| HSA (family coverage) | $8,550 | $9,550 | $9,550 |
| Solo 401(k) total | $70,000 | $77,500 | $81,250 |
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At a 4% withdrawal rate, $500,000 generates $20,000 per year from your portfolio. Add the average Social Security benefit of ~$22,884/year and a couple with $500,000 and two Social Security checks could have $65,000+ per year. For many households in lower cost-of-living areas, this is workable — but healthcare costs and inflation risk are significant concerns.
$2 million at 4% generates $80,000/year from your portfolio. Add Social Security and most households would have $100,000–$130,000 in annual retirement income — comfortably above the median household income. The key variable is healthcare: plan explicitly for it.
A pension functions like Social Security — it reduces the portfolio you need to accumulate. A $2,000/month pension ($24,000/year) reduces your required portfolio by $600,000 under the 25x rule. Treat guaranteed income sources as pre-funded portions of your retirement number.
Most financial planners exclude primary residence equity from retirement calculations unless you plan to downsize or use a reverse mortgage. Home equity is illiquid and harder to count on for regular income. Count it as a contingency cushion, not a primary income source.