Planning by Age · 11 min read
How Much Money Do You Need to Retire? A Realistic Number by Lifestyle
Surveys quote millions — your number starts with spending, guaranteed income, taxes, and how long the money must last.
Start with spending, not a magic number
Estimate yearly spending, subtract income that doesn’t come from savings (Social Security, pension), multiply the gap by ~25 (4% rule of thumb). It’s a starting point, not a guarantee.
Income gap example: $5,000 a month
$60,000/year spending, $26,400 Social Security → $33,600 gap → ~$840,000 at 4%. If the gap must come from pre-tax accounts at ~12% tax, you need ~$38,200 gross → ~$955,000 target — same lifestyle, higher number because of tax.
Lifestyle tiers (before Social Security)
Modest ~$40k/year → ~$1M; comfortable ~$60k → ~$1.5M; premium ~$100k → ~$2.5M at 4%. Subtract Social Security and pensions for your personal target.
Retire at 60 vs 67
Earlier retirement means more years of spending, Medicare gap before 65, and lower Social Security if claimed early. Many planners use ~3.5% withdrawal (~28.6× gap) for 30–35 year horizons.
Longevity risk
Plan for one spouse living into the 90s. Pair savings with income that doesn’t run out and revisit the plan regularly.
Frequently asked questions
- Is $1 million enough to retire?
- For some, yes — ~$40k/year at 4% before Social Security. For others it falls short with healthcare or early retirement.
- What is the 4% rule?
- Withdraw 4% in year one, adjust for inflation. Based on historical 30-year periods — not a promise.
- How do taxes change how much I need?
- Pre-tax dollars aren’t full spending dollars. Roth and other tax-free sources stretch further.
Educational information only. This article is not financial, tax, or legal advice and does not recommend any product.
