Decision
How much do I need to retire?
The target follows from what you intend to spend, not from what you earned. The common rule is 25 times the annual income you want from savings — but Social Security covers part of it, so the portfolio only has to fund the gap, and that distinction moves the figure by hundreds of thousands.
How to think about it
The 4% rule is the usual starting point: withdraw 4% of the balance in year one, adjust for inflation after, and the money has historically lasted 30 years across most market histories. Inverted, it is a savings target of 25× the income you want.
So $40,000 a year from savings needs roughly $1,000,000, and $60,000 needs $1,500,000 — before Social Security, which for a median earner replaces around 40% of pre-retirement income. Subtracting the benefit before applying the multiple is the single biggest correction most people can make to their target.
Time matters more than the amount. Saving $500 a month at 7% produces about $1,521,900 from age 25, $714,200 from 35, and $312,300 from 45. Matching the age-25 outcome starting at 45 needs $2,436 a month — nearly five times the contribution for the same result.
Work through these, in this order
- Where does my current plan land?Project your balance, contribution and horizon to a figure, then stress-test it at 5% instead of 7%. A plan that still works at the lower return is a plan; one that only works at 7% is a hope.Open the Retirement Calculator
- What does Social Security actually contribute?Each year deferred past full retirement age raises the benefit by roughly 8% until 70 — a guaranteed, inflation-adjusted increase no investment offers. Every dollar it covers is 25 dollars your portfolio does not need.Open the Social Security Break-Even Calculator
- What income does that pot actually pay?The more sobering direction. Converting a balance into a sustainable monthly income is where an apparently large number often turns out to be a modest one.Open the How Long Will My Savings Last?
- What if I want to stop earlier?A retirement expected to last 40 years rather than 30 argues for a withdrawal rate below 4%, which raises the multiple. Worth seeing before assuming an early date is achievable.Open the FIRE Calculator
- Is my employer adding everything it will?The match is the cheapest progress available toward any target, and per-paycheck matching without a true-up quietly forfeits part of it when contributions are front-loaded.Open the 401(k) Calculator
What the numbers together tell you
Read the target as a range rather than a figure. It moves with the return you assume, the age you stop, and how much of your spending Social Security covers — and the honest version of the answer names those assumptions rather than hiding them in a single number.
If the gap looks discouraging, the levers that actually help after 45 are, in order: raise the contribution rate, use catch-up contributions, delay claiming Social Security, work two more years, and lower the target. The last one is not defeat — spending $10,000 a year less removes $250,000 from what you must accumulate.
Projections are illustrative and assume a steady return no real portfolio delivers smoothly.
Read more about this
How Much Should You Save for Retirement by Age?
Two rules of thumb turn 'enough for retirement' into a number you can track: the salary-multiple benchmarks (1× by 30, 10× by 67) and the 4% rule (save 25× the annual income you want). Here's how to use both.
How a 401(k) Match Works (Don't Leave Free Money)
An employer 401(k) match is free money — your company adds to your retirement based on what you contribute. Here's how match formulas work, why they come first, and how to capture the full amount.
The Power of Compound Interest: Why Starting Early Wins
Compound interest means your returns earn returns. Given time, small steady contributions grow into sums far larger than what you put in — which is why the years you start early are the most valuable ones you'll ever invest.
Frequently asked questions
Is the 4% rule still reliable?
It is a planning heuristic derived from historical US 30-year retirements, not a law. Many planners now model 3.5–4% to allow for longer retirements and lower expected returns. Retiring early is the strongest argument for the lower end.
How much should I be saving each year?
The common target is 15% of gross income including the employer match — so a 5% contribution against a 5% match is two-thirds of the way there. The rate is a better progress check than a balance, because you control it directly and it responds immediately.
Does Social Security really change the number that much?
Yes. Because the target is a multiple of the income your savings must produce, every $10,000 a year Social Security covers removes about $250,000 from the amount you need to accumulate.
Related decisions
Am I saving enough?
Check your savings rate, size your emergency fund on lean spending rather than income, and see whether the total is on track for what you want later.
Roth or traditional — which should I use?
The usual framing asks whether your tax rate is higher now or later. That is correct but incomplete, and it hides the reason a Roth is often the better account even at identical rates.
Should I pay off debt or invest?
Compare a guaranteed return you cannot lose against an expected one you might. The answer is clear at both extremes and genuinely close in the middle.
Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.