How Much Do You Need to Retire?
The most widely used retirement planning guideline is the 4% Rule, also known as the Safe Withdrawal Rate. Research by financial planner William Bengen found that retirees could withdraw 4% of their portfolio in the first year of retirement, then adjust for inflation each subsequent year, and have a very high probability of not running out of money over a 30-year retirement.
This means you need approximately 25 times your annual retirement expenses saved (since 1/0.04 = 25). If you need $60,000 per year in retirement, your target is $1.5 million. This calculator uses this principle to determine your retirement target.
Retirement Savings Milestones
| Age | Savings Target | Based On |
|---|---|---|
| 30 | 1× annual salary | Fidelity guideline |
| 40 | 3× annual salary | Fidelity guideline |
| 50 | 6× annual salary | Fidelity guideline |
| 60 | 8× annual salary | Fidelity guideline |
| 67 | 10× annual salary | Fidelity guideline |