"How much do I need to retire?" is the most-Googled retirement question in the US — and most answers are useless. Either they shout a single number ($1.5M! $3M!) with no context, or they bury you in calculators that demand 40 inputs you don't know.
This guide gives you a US-specific 2026 framework with three deliverables: a retirement number tailored to your lifestyle, a savings benchmark for every age, and a monthly contribution that gets you there.
The one-line answer
Retirement number = annual spending in retirement × 25.
That's the 4% rule, applied in reverse. If you'll spend $80,000 a year, you need roughly $2,000,000 invested. Why 25×? Because withdrawing 4% per year from a balanced portfolio has, historically, lasted 30+ years across virtually every starting market environment.
This is a starting estimate, not a law of physics. We'll refine it below.
Step 1 — Estimate your retirement spending (not your income)
Most calculators ask for your income and apply a generic "you'll need 70–85% in retirement" rule. That's lazy. The right input is your future spending, because:
- You won't be saving for retirement anymore (~10–20% of income disappears).
- You won't pay payroll taxes (7.65% gone).
- The mortgage may be paid off.
- Healthcare costs go up — significantly.
- Travel, hobbies and grandkids often go up too in the first 10 years.
Build your number from four buckets:
- Foundation: housing, food, transport, utilities, insurance.
- Healthcare: Medicare premiums, supplemental, out-of-pocket. Fidelity's 2025 estimate: ~$165,000 per person over retirement, or about $7–10k/year per person.
- Lifestyle: travel, hobbies, dining, gifts, grandkids.
- Buffer: 10–15% on top for taxes and surprises.
Step 2 — Adjust for your state
Where you retire changes the number by 30–40%. The same lifestyle that costs $70,000 in Dallas costs $110,000+ in coastal California or the New York metro.
| State category | Annual spend (comfortable couple) | Implied retirement number |
|---|---|---|
| Low-cost (MS, AR, OK, WV, KY) | $55,000 | ~$1.4M |
| Mid-cost (TX, FL, GA, NC, AZ) | $72,000 | ~$1.8M |
| High-cost (CO, WA, IL metro) | $90,000 | ~$2.25M |
| Very high-cost (CA, NY, MA, HI metro) | $120,000 | ~$3.0M |
Bonus: nine states have no state income tax (FL, TX, TN, NV, WA, AK, SD, WY, NH). Several others (PA, IL, MS) exempt most retirement income. State choice can be worth a 10–20% reduction in your required number.
Step 3 — Subtract Social Security
Social Security covers a real chunk of retirement income. The 2026 maximum benefit at full retirement age is roughly $48,000/year; the average is closer to $23,000–$28,000/year. A married couple often combines for $40,000–$60,000.
Net retirement number formula:
(Annual spending − annual Social Security) × 25 = portfolio target.
Example: $80,000 spending − $40,000 SS = $40,000 portfolio gap × 25 = $1,000,000. A long way from the headline $2M.
Get your personalized estimate at ssa.gov/myaccount.
Retirement savings benchmarks by age (US 2026)
Fidelity's age-based benchmarks are the most-cited rule of thumb. They assume you save 15% of income and retire at 67 with a moderate lifestyle.
| Age | Multiple of salary saved | Example: $90k salary |
|---|---|---|
| 30 | 1× | $90,000 |
| 35 | 2× | $180,000 |
| 40 | 3× | $270,000 |
| 45 | 4× | $360,000 |
| 50 | 6× | $540,000 |
| 55 | 7× | $630,000 |
| 60 | 8× | $720,000 |
| 67 | 10× | $900,000 |
If you're behind, don't panic — the catch-up math is more forgiving than it feels because of compounding (see Step 4). If you're ahead, consider whether you can retire earlier rather than retire richer.
Step 4 — Calculate your monthly contribution
Reverse-engineer what you need to save each month to hit your number. The math:
Monthly contribution ≈ (Target − current portfolio × growth factor) ÷ annuity factor
You don't need to do this by hand. The cleanest way:
- Run a Monte Carlo projection in ProjectionLab → (#ad — affiliate link)
- Or use a free retirement calculator from Fidelity, Vanguard or Schwab.
As a rough benchmark: starting at age 30 with $0, a 7% real return, and a $1.8M target at 65 requires ~$1,300/month. Starting at 40 with $0 requires ~$2,800/month. Every decade you wait roughly doubles the required contribution.
The 4% rule — and why it's not gospel
The 4% rule comes from the Trinity Study and Bengen's research: a 60/40 portfolio with 4% withdrawals (inflation-adjusted) survived every historical 30-year period. It's a starting rule, not a guarantee. Adjustments worth knowing:
- Retiring before 60? Use 3.5% to stretch the portfolio over 35–40 years.
- Comfortable being flexible? Variable withdrawal strategies can support 4.5–5%.
- Big pension or Social Security? You can withdraw a higher % of the remaining gap.
- Sequence-of-returns risk: the first 5 years of retirement matter most. A bad market early can permanently damage the plan; a 1–2 year cash buffer is a cheap insurance policy.
Healthcare: the line item that wrecks plans
Medicare starts at 65. If you retire earlier, you bridge with ACA marketplace coverage — typically $700–$1,500/month per person before subsidies. Subsidies depend heavily on your taxable income, which is why Roth and HSA balances are so valuable for early retirees: they generate spendable cash without inflating MAGI.
Every US retirement plan should also include a long-term care conversation. Roughly 70% of 65-year-olds will need some form of LTC; the median assisted-living cost in 2026 is $5,500/month and rising. Self-insurance, hybrid life/LTC policies, or traditional LTC insurance are the three real options.
Where to put the money
- 401(k) up to the employer match — never leave it on the table.
- HSA if eligible — triple tax advantage, the best retirement account most people ignore.
- Roth IRA ($7,000 limit in 2026). See our Roth vs Traditional guide.
- Max the 401(k) beyond the match.
- Taxable brokerage — most flexible, especially for early retirement bridge years.
Keep total fund + advisor fees under 0.5%. The fee impact calculator shows that an extra 0.75% in fees over 30 years on a $1M target reduces your final balance by roughly $250,000–$300,000.
Common mistakes US savers make
- Targeting income, not spending. The 70–85% rule overshoots most plans by years of unnecessary work.
- Ignoring state taxes. A retirement plan that "works" in CA may comfortably work earlier in TN or FL.
- Underestimating healthcare. Especially the 5–10 year gap before Medicare for early retirees.
- Overpaying an advisor. A 1% AUM fee on $1.5M is $15,000/year — every year — for advice that AI and a good fee-only CFP can deliver in 2 hours. See the hidden cost of financial advisors.
- Treating Social Security as fragile. It will adjust, but it won't disappear. Plan around realistic, not catastrophic, scenarios.
US tax & investment disclaimer
2026 figures, withdrawal rates, contribution limits, Social Security estimates and Medicare costs depend on rules that change every year and on your individual income, filing status, employer plan and state. Numbers above are general guidance, not personalised advice.
This article is for educational purposes only and is not tax, legal or investment advice. Before you change your savings rate, draw down a portfolio, run a Roth conversion or claim Social Security, consult a qualified professional — a CPA, Enrolled Agent or fee-only CFP®.
Your next step
Run the four numbers above for your situation: annual retirement spending, expected Social Security, current portfolio, and required monthly contribution. Write them on one page. Then build a low-cost portfolio that funds them — and re-check the math once a year. That's all retirement planning really is.