How Much Money Do You Need to Retire?
Your retirement number is the investment portfolio you need to fund your spending for life — on top of Social Security and any pension. For a 30-year retirement starting at 65, the standard research answer is 25× your annual portfolio withdrawal need (the "4% rule"). Retire earlier and the number rises. Have more guaranteed income and it falls.
Enter your numbers below.
How the retirement number is calculated
The retirement number starts with a simple question: how much does your investment portfolio need to generate annually? That's your planned spending minus the guaranteed income you'll receive from Social Security, pensions, and other fixed sources.
If you plan to spend $80,000/year and expect $26,400 in Social Security annually ($2,200/month), your portfolio needs to generate $53,600/year. At a 4% withdrawal rate, that requires $53,600 ÷ 0.04 = $1,340,000. Not $2,000,000. Social Security dramatically changes the number.
Where the 4% rule (and 25× multiple) come from
In 1994, financial planner William Bengen tested every historical 30-year period in US market history going back to 1926 and asked: what is the highest initial withdrawal rate (as a percentage of the starting portfolio) that would not have depleted the portfolio in any historical period?1 His answer: 4.15%, using a 50/50 stock/bond portfolio with inflation-adjusted withdrawals. He called it the SAFEMAX. Rounded down, it became the "4% rule."
In 1998, three finance professors at Trinity University — Cooley, Hubbard, and Walz — confirmed the finding across multiple portfolio allocations and time horizons.3 The 25× multiple is simply the inverse of 4%: if you can safely withdraw 4% per year, you need 25× your annual withdrawal as a starting balance.
Why your retirement age changes your number
The 4% rule was designed for a 30-year retirement — roughly retiring at 65 and planning to age 95. If you retire at 55, you need your portfolio to last 40 years. Historical analysis suggests a lower starting withdrawal rate — closer to 3.3–3.5% — maintains similar success probabilities over longer horizons. That means a larger required portfolio for the same spending.
Conversely, retiring at 70 means a 25-year horizon. Higher withdrawal rates have worked historically over shorter periods, so your required portfolio is smaller. The tradeoff: you also have fewer years of retirement to enjoy it.
Morningstar's 2026 view: 3.9%
Morningstar's State of Retirement Income research (December 2025) estimates a starting withdrawal rate of 3.9% — slightly below the historical 4% — for a retiree seeking 90% probability of not depleting their portfolio over 30 years, using forward-looking capital market assumptions rather than historical averages.2 That's up from 3.7% the year prior, reflecting improved bond yields. The difference between 4.0% and 3.9% is modest: about 2.6% more portfolio per dollar of annual withdrawal. But it matters over a $1M+ portfolio.
What the retirement number doesn't tell you
The number answers one question: portfolio size at retirement. It doesn't tell you:
- Whether you'll hit the number. If you're 58 with $700K and need $1.4M by 65, whether that's achievable depends on contributions and returns. The Retirement Readiness Calculator models that trajectory.
- How to draw it down. Systematic withdrawals, the bucket strategy, and floor-and-upside approaches all yield different outcomes. Withdrawal order (which accounts to tap first) affects lifetime taxes by tens of thousands of dollars.
- When to claim Social Security. Your SS benefit at 70 is 77% higher than at 62. Delaying reduces your required portfolio — but costs you 8 years of benefits. The Social Security Calculator shows the breakeven math.
- Sequence-of-returns risk. Two portfolios with identical 30-year average returns can produce wildly different outcomes depending on whether market declines hit early or late. A $1M portfolio losing 30% in year 1 may never recover under systematic withdrawals. The Sequence of Returns Calculator stress-tests this.
- Healthcare costs. Medicare Part B premiums in 2026 are $202.90/month base — but IRMAA surcharges add $600–$5,000+/year if your income exceeds certain thresholds. Long-term care costs (nursing home: ~$9,200–$10,600/month in 2026) can dwarf investment losses as a retirement risk. Neither is in the number.
- Taxes. A $1.3M IRA and a $1.3M Roth IRA are not the same retirement number. Every dollar in a traditional IRA or 401(k) will be taxed as ordinary income when withdrawn. A Roth is tax-free. The Roth Conversion Calculator quantifies the difference.
Three scenarios at the same spending level
Assume a couple planning $90,000/year in retirement expenses:
| Scenario | Annual SS + pension | Portfolio withdrawal needed | Retirement number (4% rule) |
|---|---|---|---|
| No pension, SS at 62 ($28K combined) | $28,000 | $62,000 | $1,550,000 |
| No pension, SS delayed to 70 ($42K combined) | $42,000 | $48,000 | $1,200,000 |
| Pension + SS delayed ($42K SS + $18K pension) | $60,000 | $30,000 | $750,000 |
The difference between the first and third scenario is $800,000 in required portfolio — not from having more money, but from guaranteed income sources and claiming strategy. This is why retirement income planning matters before you've finished accumulating.
A note on the 25× rule for early retirees
The 25× multiple (4% rule) was built for a 30-year retirement. If you plan to retire at 55, you need a portfolio that lasts 40+ years. Most financial planners recommend using 28–30× for early retirement — a 3.3–3.6% starting withdrawal rate — to maintain comparable historical success rates over longer horizons. This isn't a regulation or a published standard; it's the implication of extending Bengen's framework to longer periods.
One important consideration for early retirees: Social Security won't start immediately. From 55 to whenever you begin SS (typically 62–70), your portfolio covers the full spending. Your effective portfolio need is higher in those pre-SS years, which is why tools like the 72(t) SEPP Calculator and the Early Retirement Health Insurance Guide matter.
Your number is the start — not the plan
Knowing you need $1.4M tells you the target. A retirement income specialist helps you build the withdrawal sequence, Social Security strategy, Roth conversion schedule, and tax plan that lets that $1.4M actually last. Fee-only. No commissions.
Sources
- Bengen, W.P. (1994). "Determining Withdrawal Rates Using Historical Data." Journal of Financial Planning, October 1994. Original research establishing the 4% SAFEMAX for 30-year retirement horizons with US market data 1926–1976.
- Morningstar. State of Retirement Income, December 2025. Forward-looking safe withdrawal rate estimate of 3.9% for 30-year retirement with 90% probability of success. morningstar.com
- Cooley, P.L., Hubbard, C.M., & Walz, D.T. (1998). "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable." AAII Journal, February 1998. The "Trinity Study" confirming 4% success rates across multiple portfolio allocations over 30-year horizons.
- SSA.gov. Social Security Retirement Benefits: Full Retirement Age. Full retirement age is 67 for those born 1960 or later; benefits at 62 are reduced to 70% of the full-retirement-age amount; benefits at 70 are 124% of FRA amount.
Withdrawal rate estimates by retirement age are approximations based on the Bengen/Trinity Study framework extended to different time horizons. They are not published standards. Values current as of May 2026. RetireeAdvisorMatch.com is a matching service, not a licensed advisory firm. Content is for informational purposes only and does not constitute financial, tax, or investment advice.