How Much Money Do I Need to Retire?
Your retirement number is not simply a multiple of salary. Retirement is funded by spending needs, reliable income sources and assets that can support the remaining gap. Two people earning the same amount today can need very different portfolios if their retirement spending, housing, Social Security benefits or retirement ages are different.
ExitPlan treats the retirement number as a scenario that should be recalculated when inputs change. The goal is a defensible range, not a false promise that one exact number guarantees success.
Estimate retirement spending first
Start with the lifestyle you expect to fund: housing, food, transportation, health care, travel, taxes, insurance and discretionary spending. Some expenses may fall after work; others can rise. Using today's spending as a starting point is often more concrete than using salary.
Subtract predictable retirement income
Social Security, pensions, annuities or dependable business income may cover part of retirement spending. The portfolio then needs to support the remaining gap. Use official Social Security estimates and avoid assuming uncertain income is guaranteed.
Choose transparent withdrawal assumptions
A withdrawal rate is a planning assumption, not a guarantee. Lower rates generally require more starting assets, while higher rates create more risk of depletion. Time horizon, asset allocation, inflation and flexibility all matter. Test more than one rate instead of hiding the assumption.
Turn the target into a monthly contribution gap
Once you have a target range and retirement age, compare it with current savings and expected growth under conservative, base and stronger scenarios. The remaining gap can be translated into a monthly contribution target that you can compare with real business cash flow.
Calculate My Retirement Number
Use an interactive retirement scenario and see how age, savings and monthly contributions change the outcome.
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Frequently asked questions
Is there one amount everyone needs to retire?
No. The required amount depends on spending, reliable income, retirement age, taxes, health costs, investment assumptions and desired safety margin.
Should I use the 4% rule?
A 4% withdrawal rate can be used as a planning scenario, but it is not a guarantee. Test other rates and consider professional advice for an actual retirement-income strategy.
How often should I update my retirement number?
At least annually and after material changes in income, spending, savings, business value, retirement age or Social Security assumptions.