Updated May 2026 — If you want a fast answer, use the retirement calculator. If you want the logic behind the answer, start here.
The short answer
Most people do not need a single magic number. They need a range based on spending, guaranteed income, retirement age, and taxes. The simplest starting point is still the classic 25x rule, but the right number changes once you add Social Security and inflation.
Step 1: Start with annual spending
If you spend $72,000 per year in retirement, that is your starting point. Then subtract income that does not need to come from your portfolio.
Common income sources
- Social Security
- Pension income
- Part-time work
- Rental income
Step 2: Estimate the gap
Use this formula:
Annual spending - guaranteed income = portfolio income needed
For example:
| Item | Amount |
|---|---|
| Annual spending | $72,000 |
| Social Security | -$28,800 |
| Portfolio income needed | $43,200 |
At a 4% withdrawal rate, that means a portfolio of about $1.08 million.
Step 3: Check it against reality
Calculate the exact retirement number behind your lifestyle
Model spending, Social Security, and withdrawal rates together so you know your real target.
Calculate My Retirement Number →The 4% rule is a useful first pass, but it does not tell you whether a 30-year retirement or a 40-year retirement is actually safe. That is where Monte Carlo analysis helps.
If your retirement starts early, or if you expect higher healthcare costs, a static answer can be too optimistic.
Step 4: Build a range, not a fantasy
Consider three scenarios:
| Scenario | What changes |
|---|---|
| Conservative | Higher healthcare, lower returns, more travel |
| Base case | Your current spending and expected benefits |
| Stretch case | Lower spending, later retirement, higher savings |
If the numbers only work in the best case, you do not have a retirement plan yet.
What people usually miss
Taxes
Withdrawals from Traditional 401(k)s and Traditional IRAs are taxable. A $1 million balance is not the same as $1 million of spending power.
Inflation
The groceries, insurance, and healthcare you buy at 70 will not cost the same as they do today.
Longevity
Planning for 25 years is different from planning for 35 years. Early retirees need a bigger margin of safety.
A better way to test your number
Instead of guessing once, run your data through a real calculator and compare scenarios:
- Retire at 62 vs. 67
- Claim Social Security early vs. late
- Use a 4% vs. 3.5% withdrawal rate
- Test a higher healthcare budget
You can do that with the retirement calculator and the Social Security calculator.
If you want the exact answer
The exact answer is the number that survives your actual assumptions, not the one that looks nice on a spreadsheet. If you want a fast benchmark, use the tool. If you want to understand the math, read our methodology.