How Much to Save for Retirement: How to Find Your Number

Retirement Planning

This guide explains the method for finding your own retirement number. For where balances typically stand across every age group, see retirement savings by age. To turn your own inputs into an exact monthly contribution and projected balance, use the retirement savings calculator.

How Much to Save for Retirement Each Year

Fidelity suggests aiming for about 15% of pre-tax income for retirement, including any employer contributions, as a long-term planning guideline. It’s a starting reference, not a fixed rule. Someone starting later or aiming for early retirement may need a higher rate, while someone already ahead of a typical trajectory may need less. High-interest debt or an unstable income can also justify temporarily prioritizing differently before ramping contributions up toward that target.

How to Calculate Your Retirement Number

The savings rate above answers how much to contribute along the way. The steps below answer a related but different question: what total portfolio you’re actually aiming for.

Step 1: Estimate Annual Retirement Spending

Start with what you expect to spend, not what you currently earn. Consider housing, healthcare, food, transportation, travel, taxes, insurance, and discretionary spending. This doesn’t need to be a full line-item budget. A reasonable estimate is enough to work with.

Step 2: Estimate Reliable Retirement Income

Include Social Security, a pension, annuity income if applicable, and any other income you can reasonably count on. Use your own SSA benefit estimate rather than a national average, since your actual benefit depends on your earnings history and the age you claim.

Step 3: Calculate the Annual Portfolio Gap

Expected annual spending minus reliable retirement income equals the amount your portfolio needs to provide each year.

Step 4: Convert the Annual Gap to a Portfolio Target

Divide the annual portfolio-income need by an assumed withdrawal rate. At 4%, that’s the same as multiplying the annual gap by 25. The 4% figure is a rule of thumb based on historical retirement-withdrawal research, not a guarantee. The next section explains the framework in more detail.

Worked Example: Spending, Social Security, and the Portfolio Gap

For an illustrative example, consider a household expecting to spend $60,000/year in retirement with an estimated $24,000/year from Social Security. The portfolio would need to cover the remaining $36,000/year. At a 4% withdrawal rate, that’s a target of roughly $900,000. Change the spending estimate, Social Security benefit, or withdrawal rate, and the target changes accordingly. To calculate your own retirement savings target with your actual numbers, use the calculator.

What the 4% Rule Means

The 4% rule and the 25x shortcut are the same relationship, not two separate methods: 25x is simply the inverse of a 4% withdrawal rate. The 4% figure comes from research on safe withdrawal rates, originating with financial planner William Bengen and later expanded by the Trinity Study, examining how a diversified stock-and-bond portfolio has historically held up over multi-decade retirement periods. It’s a historical planning guideline, not a guarantee, and the appropriate rate for your own plan can differ based on retirement length, asset mix, and how much flexibility you have to adjust spending.

Salary Multiples: A Useful Benchmark, Not Your Final Answer

Fidelity also publishes salary-multiple milestones, including a guideline of about 10x salary by age 67, as a quick planning checkpoint. These are useful for a quick checkpoint, but they answer a different question from a spending-based target. They’re tied to what you earned, not what you’ll actually spend, so they can overstate the target for a high earner with modest expenses and understate it for someone with higher spending. For the full benchmark, average, and median data across every age group, see retirement savings by age.

How Social Security Changes the Number

None of the methods above account for Social Security unless you subtract it explicitly in Step 2, and leaving it out is one of the more common ways a retirement target gets overstated. The average retired-worker benefit was about $2,071/month, or roughly $24,852/year, in early 2026, according to the Social Security Administration. That average provides useful context, but it isn’t your benefit. Your own estimate from SSA’s calculators, based on your earnings history and claiming age, is the more relevant input for your target. The amount also depends on when you claim, so treat Social Security as one input in the calculation rather than a fixed figure.

How Retirement Age Changes the Number

Retiring earlier than a traditional retirement age means fewer earning and contribution years, a longer period the portfolio has to cover on its own, and a possible gap before Social Security becomes available at 62, the earliest claiming age, or before Medicare eligibility begins at 65.

Retiring later means more contribution years and a shorter draw-down period, and it can mean a higher Social Security benefit if you delay claiming past your full retirement age, which depends on your birth year. Delayed retirement credits stop at age 70. Continuing to work after 70 doesn’t create additional delayed-retirement credits, although additional earnings can still affect the benefit calculation if they replace a lower-earning year in your record.

How Inflation Affects Your Retirement Target

A retirement number is easiest to reason about in today’s dollars. A round figure like $1 million loses meaning without a date attached to it because purchasing power erodes over time. In the historical 4% framework, withdrawals are adjusted for inflation after the first year; the 25x shortcut is simply a way to estimate the starting portfolio from that initial 4% withdrawal, which is part of why the framework holds up better than a flat number stated without context. Reviewing your assumptions periodically, rather than treating any single figure as fixed for decades, keeps the target realistic as circumstances change.

Taxes and Healthcare Matter Too

The account type you save in affects how much of your balance you actually keep. Withdrawals from a Traditional 401(k) or IRA are generally taxable as ordinary income, while qualified withdrawals from a Roth account are generally tax-free. Healthcare costs are a separate factor worth flagging: Medicare doesn’t begin before 65 for most people, so anyone retiring earlier needs to budget for private coverage in the meantime, and healthcare spending more broadly can shift your annual-spending estimate from Step 1. This isn’t a full tax or healthcare planning guide. The point is that both belong in the estimate. If you’re still building out which accounts to use, how to start investing covers the mechanics.

How Much Should You Save Per Month?

Your monthly savings requirement depends on your current balance, years until retirement, target portfolio, and assumed rate of return. This is the kind of calculation that benefits from your actual inputs rather than a generic table. Illustrative only: someone with no prior savings, contributing consistently at a 7% average annual return over 32 years, would need roughly $420/month to reach approximately $600,000. Change the starting balance, timeline, or target, and the required monthly amount changes with it. For your own numbers, use the retirement savings calculator.

What If the Number Feels Too High?

A six- or seven-figure target can look difficult if you’re far from it today. A few levers, used individually or together, can bring the number and your current trajectory closer together: increasing your contribution rate gradually rather than all at once, delaying retirement by even a few years, reducing expected retirement spending, increasing reliable retirement income, working part-time during early retirement if that fits your goals, reassessing housing costs, or simply reviewing the assumptions behind the number each year rather than treating it as fixed. Which of these makes sense depends on your situation rather than a universal order.

Why Headline Retirement Numbers Can Mislead

Surveys periodically produce a “number you need to retire,” and one commonly cited figure in 2026 is around $1.46 million, according to Northwestern Mutual’s 2026 Planning & Progress Study. It comes from people self-reporting what they think they’d need to feel comfortable, so it reflects sentiment rather than a calculated target. It doesn’t account for your actual spending, Social Security benefit, or retirement timeline. A survey average like this is worth knowing about, mainly as a reminder that the number that matters is the one built from your own inputs using the steps above, not a survey average.

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