How much do I need to retire?

The short answer

Take the annual spending you expect in retirement, subtract the guaranteed income you will actually receive (Social Security, any pension, an annuity), and divide the remaining gap by a sustainable withdrawal rate. Morningstar's current research puts the safe starting withdrawal rate for a new retiree at 3.9% for a 30-year retirement funded by a 30% to 50% stock portfolio, assuming a 90% success rate (Morningstar, 2026). Dividing by 3.9% is the same as multiplying by about 25.6.

So a household that needs $50,000 a year from the portfolio is looking at roughly $1.28 million. A household that needs $25,000 from the portfolio is looking at about $640,000. Fidelity's savings-multiple shortcut lands in the same neighborhood: 10 times your preretirement income by age 67, 12 times if you stop at 65, 8 times if you work to 70 (Fidelity).

Estimate your number now

Treat the output as a starting range, not a verdict. The calculator cannot see your tax mix, your health insurance bridge before Medicare at 65, or the fact that spending in most households falls in the late seventies and rises again with care costs. Those three items typically move a retirement target by six figures.

The 4% rule, and the fair critiques of it

Bill Bengen's original rule was mechanical: withdraw 4% of the portfolio in year one, then increase that dollar amount with inflation every year after. Tested against U.S. market history, a 30-year retirement never ran dry, even starting in the worst sequences on record. Michael Kitces notes that a 60/40 portfolio earned a 6.01% real return on average between 1871 and 2021, and 4.76% even in the bottom quartile of 30-year stretches (Kitces.com).

Three critiques matter, and one does not.

Critique 1: valuations and yields change the starting rate

Forward-looking models produce lower numbers than history does. Morningstar's published base case has moved from 3.3% in its 2021 report to 3.8%, 4.0%, 3.7% and 3.9% in the years since. That range, 3.3% to 4.0%, is the honest planning band for a 30-year horizon.

Critique 2: nobody spends on autopilot

The rule assumes you take an inflation-adjusted raise in a year your portfolio drops 25%. Real retirees do not. Morningstar found that retirees willing to accept fluctuating income can start near 6% using a constant-percentage or endowment method, and Kitces estimates that small permanent spending cuts after negative years add roughly 0.5 percentage points to the safe rate. Flexibility is worth more than any fund selection.

Critique 3: fees and taxes come out of the same 4%

A 4% withdrawal inside a portfolio carrying 1.5% in all-in advisory and fund costs is not a 4% plan. See our breakdown of advisor fees before you set a rate.

The critique that does not hold up is that the rule is reckless. Kitces points out the opposite failure mode: following the 4% rule historically left the retiree with more than six times the starting principal about as often as it left them below their starting balance. Four percent is closer to a floor than a ceiling for a 30-year retirement.

Safe withdrawal rates if you retire early

A 3.9% rate is built on a 30-year horizon. Retire at 50 and you may be funding 45 years, which is a materially different problem: more inflation compounding, more market cycles, and no Medicare until 65.

These bands extend Morningstar's published horizon logic, which finds that shorter horizons support higher starting rates and that pushing equity above roughly 50% tends to lower, not raise, the safe starting percentage. Early retirees also carry two costs their calculators usually miss: an ACA marketplace premium until 65 and a Medicare Part B premium of $202.90 a month in 2026 plus a $283 annual deductible once they get there (CMS).

The replacement-ratio method

The second way to reach a number starts from income rather than spending. Fidelity's research, built on Bureau of Labor Statistics consumption data for workers aged 50 to 65, estimates that a typical household needs to replace about 45% of preretirement income from savings, roughly 35% for a below-average lifestyle and 55% for an above-average one, with Social Security expected to cover the rest.

Those targets assume you retire at 67, save 15% of income including the employer match from age 25, keep more than half the portfolio in stocks over your lifetime, and plan through age 93. Change any assumption and the multiple changes.

Use the replacement ratio as a sanity check on the spending method, not as a substitute. A household with a paid-off house and no dependents can live well on 55% of gross; a household still paying a mortgage into retirement often needs 85%.

What Social Security timing does to the number

Claiming age is the largest single lever most people have. Claiming at 62 when your full retirement age is 67 cuts the benefit by as much as 30% (SSA). Delaying past full retirement age adds 8% a year, two-thirds of 1% per month, for anyone born in 1943 or later, and the credits stop at 70 (SSA).

The 2026 figures: benefits rose by a 2.8% COLA, the maximum benefit for a worker retiring at full retirement age is $4,152 a month, the estimated average retired-worker benefit is $2,071 a month, and an aged couple both receiving benefits averages $3,208 (SSA 2026 COLA fact sheet). The earnings test withholds $1 of benefits for every $2 earned above $24,480 before full retirement age.

Run the arithmetic on a single worker with a $2,600 monthly benefit at 67. Waiting to 70 raises it roughly 24%, to about $3,224, or $7,500 more per year. At a 3.9% withdrawal rate, that extra guaranteed, inflation-indexed income is worth around $192,000 of portfolio you no longer need to have saved. The catch is that you fund those three years from the portfolio instead.

Sequence-of-returns risk is the real failure mode

Two retirees can earn the same average return over 30 years and get opposite outcomes, purely because of the order. Morningstar's work found that retirees who hit poor returns in the first five years and did not cut spending were far more likely to run out of money than retirees who saw early gains, and the same held for retirees who met high inflation early. Kitces makes the related point that the first 15 years are where sequence risk concentrates.

Four defenses actually work:

• Two years of cash. Hold 12 to 24 months of portfolio-funded spending in T-bills or a money market so a bad year does not force selling equities.
• A spending rule with brakes. Skip the inflation raise after a negative year, or use guardrails that trim withdrawals 10% when the portfolio drops past a threshold.
• A rising equity glide path. Start retirement more conservative, roughly 30% to 50% stocks, and drift up as the sequence-risk window closes.
• Guaranteed income for fixed costs. Cover housing, insurance and food with Social Security, a pension or an income annuity so market losses hit discretionary spending only.

Our retirement income planning page walks through how those pieces fit together, and annuities explained covers when a floor is worth its cost.

Three worked examples

Example 1: $60,000 income, single, retiring at 67

Target spending at 80% of gross is $48,000. A benefit near the 2026 average of $2,071 a month provides about $24,900, leaving a $23,100 gap. At 3.9%, the portfolio target is about $592,000. Fidelity's 10x shortcut says $600,000, which is a useful agreement between two independent methods.

Example 2: $120,000 household, married, retiring at 65

Target spending at 75% is $90,000. Combined benefits at 67 of roughly $4,100 a month give $49,200, leaving a $40,800 gap, or about $1.05 million at 3.9%. Retiring two years before benefits start means bridging $90,000 a year twice, so add roughly $180,000 of designated bridge assets plus ACA marketplace premiums, for a working target near $1.2 million. Fidelity's 12x rule for retiring at 65 says $1.44 million, and the gap between the two is almost entirely a claiming-age assumption.

Example 3: $250,000 household, married, retiring at 60

Target spending at 70% is $175,000, and the horizon is 35 to 40 years, so use 3.3%. One spouse near the maximum $4,152 benefit who delays to 70 collects roughly $5,150 a month; add a $2,600 spousal benefit and guaranteed income reaches about $93,000 a year from age 70. The portfolio funds $175,000 a year for ten years first, roughly $1.75 million of designated bridge, then covers an $82,000 gap forever, which at 3.3% is about $2.48 million. Overlapping the two needs, the practical target is roughly $3.4 million to $3.8 million. This household also has the largest Roth conversion opportunity of the three, because it has a decade of low-income years before RMDs begin at 73.

Five mistakes that break the number

• Planning in pretax dollars. A $1.5 million traditional 401(k) is not $1.5 million of spending. In 2026 the standard deduction is $32,200 for a married couple filing jointly and the 22% bracket starts above $100,800 of taxable income, so most retirees give back 10% to 20% of withdrawals.
• Ignoring IRMAA. Two years after a big income year, Medicare surcharges arrive. A joint MAGI just over $218,000 in 2024 raises 2026 Part B from $202.90 to $284.10 a month per person and adds $14.50 to Part D.
• Forgetting the health insurance bridge. Retiring at 60 means five years of marketplace coverage. Price it before you set a date.
• Assuming flat spending. Most households spend more in the first decade, less in the second and more again if care is needed. A single average understates both tails.
• Skipping the survivor scenario. When one spouse dies, the household keeps the larger benefit only. Model the widow or widower budget, not just the joint one.

PolicySherpas advisory services are offered through a registered investment adviser, and nothing on this page is individualized investment, tax, or legal advice. Figures are illustrations based on the cited public data, not projections of your results, and results vary by state, tax situation, and market outcome.