How Much Do You Need
to Retire Comfortably?

How Much Do You Need to Retire?

The most common benchmark is the 4% rule: withdraw 4% of your portfolio in year one, then adjust for inflation each year. Research by Bengen (1994) and the Trinity Study found that a 4% initial withdrawal rate sustained a 30-year retirement in nearly all historical market scenarios.

Your Retirement Number

To find your retirement number, divide your desired annual income from savings by 0.04. If you need $60,000/year from your portfolio, you need $1,500,000. Social Security income reduces what you need from savings — if Social Security covers $20,000, you only need $40,000/year from your portfolio, requiring $1,000,000.

Are You On Track? The Fidelity Benchmarks

Fidelity recommends saving these multiples of your annual salary by each age:

• Age 30: 1× your salary saved
• Age 40: 3× your salary
• Age 50: 6× your salary
• Age 60: 8× your salary
• Age 67: 10× your salary

These are guidelines, not laws. Higher earners typically replace a smaller percentage of income from Social Security, so they need to save more. Lower earners get a larger proportional benefit from Social Security.

Social Security: How Much Will You Get?

Your Social Security benefit depends on your 35 highest-earning years and when you claim. Claiming at 62 reduces your benefit by up to 30%. Waiting until 70 increases it by 8% per year past full retirement age. For most people, delaying to at least full retirement age (67 for those born after 1960) is advantageous if you're healthy and have other income sources.

The Biggest Retirement Planning Mistakes

Starting late is the costliest. Someone who starts at 25 and stops at 35 often outperforms someone who starts at 35 and never stops — because early money has so much more time to compound. Withdrawing early triggers a 10% penalty plus income taxes before age 59½. Underestimating healthcare costs is common — Fidelity estimates a 65-year-old couple will spend $330,000 on healthcare in retirement.