RetirementBeginner6 min read

How much you actually need to retire

The honest math behind 'your number,' minus the finance-industry theatrics.

Retirement calculators love to spit out numbers like '$2.7 million' that feel either impossible or absurd. The actual math is simpler than the industry admits, and it hinges on one question: how much do you spend per year, right now?

The 25x rule

A classic back-of-envelope: multiply your annual expenses by 25. That's a starting estimate of the portfolio size that could, with high probability, sustain you indefinitely. If you spend $50k/year, you need roughly $1.25M. If you spend $100k/year, $2.5M.

The 25x number comes from the 4% safe withdrawal rate studies, which found that withdrawing ~4% of a stock/bond portfolio in year 1 and adjusting for inflation each year after would have survived almost every 30-year historical window.

Spending, not income, is what counts

This is the big insight. Two people with the same income can have very different retirement numbers. A $200k earner spending $80k/year needs half as much as one spending $160k. Retirement is a spending problem, not an income problem.

Why Social Security changes the math

Social Security replaces roughly 30–40% of pre-retirement income for middle earners. That means you don't need your portfolio to fund 100% of your retirement expenses — only the gap between Social Security and your spending. For many people, that reduces the 25x number significantly.

The boring ranges

Modest retirement ($40–50k/year): $600k–$1M portfolio + Social Security.
Comfortable retirement ($70–90k/year): $1.2M–$1.8M portfolio + Social Security.
Luxurious retirement ($150k+/year): $3M+ portfolio + Social Security.

Put this into practice

Worth tracks your accounts, budgets, and goals — so the concepts in this article aren't just theory.

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