How Much Retirement Savings Do You Need? By Age & Income

"How much do I need to retire?" is one of the most searched money questions, and most answers are either a scary big number or a vague "it depends". Both are unhelpful. The honest truth is that the answer is built from a few simple pieces, and you can estimate them yourself in about ten minutes.

This guide gives you those pieces, with real examples, so you can see roughly where you stand and what to do next. These are rules of thumb and not promises, so treat the results as a direction, not a verdict.

The quick answer

• A common rule of thumb is to plan on replacing about 70% to 80% of your pre-retirement income each year.
• The 4% rule says you can take about 4% of your savings in the first year of retirement, then adjust for inflation. So you need about 25 times the yearly amount your savings must provide.
• A popular milestone set from Fidelity suggests 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60 and 10x by 67.
• Fidelity suggests saving at least 15% of your income each year, including any employer contribution, starting at age 25.

Step 1: Estimate how much you will spend

Retirement costs are not your income, they are your spending. Many planners use about 70% to 80% of your pre-retirement income as a starting estimate. A Social Security Administration research article refers to the 70 percent replacement rate that financial advisers recommend. Some costs fall (no more commuting, no more 401(k) contributions, maybe a paid-off home). Others rise, especially health care.

Example: you earn $60,000 now. At 75%, you need about $45,000 a year in retirement.

Step 2: Subtract guaranteed income

Social Security is the biggest piece of guaranteed income for most people. The Social Security Administration says it replaces roughly 40% of the pre-retirement earnings of an average worker. The SSA estimated the average retired worker benefit at about $2,071 a month in January 2026, but yours depends on your earnings record. Log in at my Social Security to see your own estimate. Add any pension or other fixed income you expect.

When you claim matters. If your full retirement age is 67, claiming at 62 permanently cuts your monthly benefit by about 30%. Waiting until 70 raises it by about 8% for each year you delay after 67, reaching about 124% of the full amount.

Back to the example. Social Security might cover about $24,000 of the $45,000 a year. That leaves a gap of about $21,000 a year to come from your savings.

Step 3: Turn the gap into a savings target

Here is the 4% rule in action: multiply the yearly gap by 25.

$21,000 x 25 = $525,000

That is about 8.75 times a $60,000 salary. It is also in the same range as the "10x by 67" milestone, which is built to be a safe, round goal.

How good is the 4% rule?

The 4% rule comes from a 1994 study by the financial planner William Bengen in the Journal of Financial Planning, which tested how much a mixed stock and bond portfolio could pay out each year, rising with inflation, without running out over 30 years. It is a rule of thumb. Fidelity, for example, describes a sustainable withdrawal rate as no more than 4% to 5% a year with adjustments for inflation. Some experts suggest starting lower for very long retirements or for people who retire early. Others adjust spending in down markets. Either way, it is a good way to get a ballpark number, not a precise guarantee.

Savings goals by age

These milestones are Fidelity's. They assume you save 15% of your income each year (including any employer contribution) starting at age 25, invest more than half of it in stocks on average, and retire at 67. Here is what they look like for a $60,000 salary:

If you are behind these numbers, you are in very large company. They are targets, not a pass or fail test. What matters most is the next step you take.

How much should you save each month?

The answer depends on how long you have. This table shows the monthly amount needed to reach a goal, if your savings grow 6% or 7% a year (an example, not a promise):

Look at the $500,000 rows. Starting 20 years later more than doubles the monthly cost. That is compound interest at work, and why early starts are so valuable. To test your own numbers, use the retirement savings calculator.

Where to save: a simple order

1. Take the full employer match. If your employer adds 50 cents for every dollar you put in, up to a limit, that is a 50% return right away.
2. Fill an IRA. The 2026 limit is $7,500 (a bit more if you are 50 or older). A Roth IRA grows tax-free if you qualify, and a traditional IRA may lower your tax now.
3. Go back to the 401(k). The 2026 limit is $24,500. If you are 50 or older you can add $8,000 more, and ages 60 to 63 can add up to $11,250.
4. Use an HSA if you have a high-deductible health plan. It is tax-free going in, growing and coming out for health costs.

Check your limits on the IRS 401(k) limits page, because they change almost every year. And if you are not saving anything yet, an emergency fund comes first. Read how to build an emergency fund on any income.

Traditional vs Roth: a quick idea

• Traditional (pre-tax): you get a tax break now and pay tax when you withdraw. It lowers your paycheck by less than the amount you save.
• Roth (after-tax): no break now, but tax-free withdrawals later. It is useful if you expect to be in a higher bracket in retirement.

Many people use both, so they have flexibility in retirement. Your own tax situation matters, so a quick check with the tax bracket calculator can help.

What if you are behind?

• Raise your rate a little each year. Add 1% of pay every time you get a raise.
• Use catch-up contributions if you are 50 or older.
• Work a little longer. Each extra year adds savings, shortens the years you need money for, and raises your Social Security.
• Delay Social Security if you can afford to, because the benefit rises with each year you wait up to age 70.
• Cut big costs. A smaller home, a paid-off car or a lower-cost area can shrink the number you need.
• Keep the debt in check. Entering retirement without a mortgage or card balances lowers the monthly income you need.

Things people forget

• Inflation. $45,000 today buys less in 30 years. The 4% rule includes yearly increases for that.
• Health care. Medicare does not cover everything. Plan for premiums, drugs and out-of-pocket costs.
• Taxes. Withdrawals from traditional accounts are taxed as income.
• Living longer. Plan to age 90 or beyond, not 80.

Frequently asked questions

How much do I need to retire?

A simple estimate is 25 times the yearly amount your savings need to provide after Social Security and any pension. For many middle-income people, that comes to something like eight to ten times their final salary.

What is the 4% rule?

It says that if you withdraw 4% of your portfolio in the first year of retirement and then adjust that amount for inflation, your money has a good chance of lasting 30 years. It is a guideline, not a guarantee.

How much should I have saved by 40?

Fidelity's guideline is about three times your annual salary. If you earn $70,000, that is about $210,000. If you are behind, focus on raising your savings rate from here.

Can I retire at 60 with $1 million?

It depends on your spending. At 4%, $1 million gives about $40,000 a year before Social Security, which does not start until 62 at the earliest. Retiring at 60 means a longer retirement, so many planners suggest a lower withdrawal rate and a plan for health insurance until Medicare at 65.

Does the 4% rule include taxes?

No. The 4% is the gross amount you take out. If the money is in a traditional account, you will pay income tax on it, so your spendable amount is less.

How much of my paycheck should go to retirement?

Fidelity suggests at least 15% of your income, including any employer contribution. If you cannot do that yet, start at 5% to 6% to get the match, and raise it by 1% a year.

The bottom line

You do not need to know the perfect number. You need an estimate, a monthly amount you can automate, and a habit of raising it over time. Check your Social Security estimate, plug your own figures into a calculator, and start with the next dollar. For free, plain-language guides, see the U.S. Department of Labor's savings fitness guide.

Sources

• How much do I need to retire? (savings multiples by age, 15% savings rate, withdrawal rate), Fidelity Investments
• Understanding the benefits (2026): how much Social Security replaces, and the effect of claiming age, Social Security Administration
• Alternate measures of replacement rates for Social Security benefits and retirement income (Social Security Bulletin, vol. 68, no. 2), Social Security Administration
• 2026 Cost-of-Living Adjustment (COLA) fact sheet, Social Security Administration
• 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500, Internal Revenue Service
• Retirement topics: 401(k) and profit-sharing plan contribution limits, Internal Revenue Service

The 4% rule comes from Bengen WP, "Determining withdrawal rates using historical data," Journal of Financial Planning, October 1994. The monthly savings table is calculated by script with deposits at the end of each month, and the growth rates are examples, not promises. Last reviewed October 13, 2026.