Retirement Calculator

Planning for Retirement: How Much Do You Really Need?

Retirement planning is one of the most important financial exercises you can do, yet studies show that most people significantly underestimate how much they’ll need. The earlier you start planning, the more options you have and the less you need to save each month to reach your goals.

A comfortable retirement depends on several factors: your desired lifestyle, where you plan to live, healthcare costs, inflation, and how long your retirement might last. Modern retirees can expect to spend 20-30+ years in retirement, making it crucial to plan carefully.

The 4% Rule and Your Retirement Number

The most widely used retirement planning guideline is the 4% rule, derived from the Trinity Study. It suggests that you can safely withdraw 4% of your portfolio in the first year of retirement, then adjust for inflation each subsequent year, with a very high probability of not running out of money over 30 years.

To calculate your retirement number, multiply your desired annual retirement income by 25. If you want $60,000 per year in retirement, you need approximately $1,500,000 saved. If you want $100,000 per year, you need $2,500,000.

Factors That Affect Your Retirement Savings

Social Security: For most Americans, Social Security will cover 30-40% of pre-retirement income. You can check your estimated benefits at ssa.gov. This reduces the amount you need from personal savings.

Healthcare costs: The average retired couple may need $300,000+ for healthcare expenses in retirement, making this one of the largest retirement expenses after housing.

Inflation: At 3% annual inflation, something that costs $50,000 today will cost about $121,000 in 30 years. Your retirement plan must account for rising costs.

Retirement Accounts to Consider

401(k): Employer-sponsored plans often include matching contributions — always contribute enough to get the full match, as it’s essentially free money. The 2026 contribution limit is $23,500 ($31,000 if over 50).

IRA/Roth IRA: Individual retirement accounts offer tax advantages. Traditional IRAs offer tax-deferred growth, while Roth IRAs offer tax-free withdrawals in retirement. The 2026 contribution limit is $7,000 ($8,000 if over 50).

Use our retirement calculator above to see how your current savings trajectory compares to your retirement goals, and discover what adjustments could make the biggest difference.