Calculate your retirement number using the 25x rule. See how income, spending, age, and withdrawal rate affect your target. Free retirement calculator included.
📊 The Short Answer
The standard rule is 25x your annual expenses. If you need $60,000/year in retirement, you need $1.5 million. For $40,000/year: $1 million. For $80,000/year: $2 million. This assumes a 4% withdrawal rate and a 30-year retirement. For early retirement (40+ years), use 30-33x expenses (3-3.3% withdrawal rate). Subtract any pension or Social Security from your annual need before multiplying.
Retirement Target at $40k/year spending
25 × $40,000. At 4% withdrawal, you can spend $40,000/year inflation-adjusted with ~95% success over 30 years.
Retirement Target at $60k/year
25 × $60,000. This is the most common target for middle-income retirees with a paid-off home.
Retirement Target at $80k/year
25 × $80,000. Comfortable retirement with travel and hobbies.
Early Retirement at 50 (40-year horizon)
Use 33x rule (3% withdrawal) for longer retirements. 33 × $60,000 = $1,980,000.
With Social Security ($2,000/month at 67)
If Social Security covers $24,000/year, your portfolio only needs to generate $36,000. Target drops from $1.5M to $900k.
| Annual Spending | 25x Target (30yr) | 33x Target (40yr+) | Monthly Withdrawal (4%) |
|---|---|---|---|
| $30,000 | $750,000 | $990,000 | $2,500 |
| $40,000 | $1,000,000 | $1,320,000 | $3,333 |
| $50,000 | $1,250,000 | $1,650,000 | $4,167 |
| $60,000 | $1,500,000 | $1,980,000 | $5,000 |
| $80,000 | $2,000,000 | $2,640,000 | $6,667 |
| $100,000 | $2,500,000 | $3,300,000 | $8,333 |
The 25x rule comes from the 4% rule: if you withdraw 4% of your portfolio in year 1 ($40,000 from $1M), adjusted for inflation annually, your portfolio has a 95%+ chance of lasting 30 years. To find your number: Annual Expenses × 25 = Target. For early retirement (40+ years), use 30-33x. Subtract guaranteed income (Social Security, pension) before calculating.
Outcome: If you save $200,000 by age 35, it grows to $1.5 million by 65 at 7% return — with no additional contributions. You can 'coast' at a lower-paying but more enjoyable job.
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Outcome: Selling a $500,000 home and buying a $250,000 condo frees $250,000 in equity. That adds $10,000/year at 4% withdrawal — reducing your required portfolio by $250,000.
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💡 What This Means For You
The 25x rule gives you a solid target, but it's a starting point, not a guarantee. Track your actual spending for 1-2 years before retiring — most people underestimate. Build in buffers for healthcare ($5,000-10,000/year), long-term care, and travel. If you're retiring before 60, use 30-33x expenses. The single biggest variable you control is your spending — reducing annual expenses by $10,000 reduces your required portfolio by $250,000.
The 4% rule, from the 1998 Trinity Study, has held up well historically. In 95% of 30-year periods, a 60/40 portfolio survived 4% withdrawals. For longer retirements (40+ years), 3-3.5% is more appropriate. Some experts argue for 3.5% even for 30 years given current high valuations.
Subtract your annual pension from your annual spending need, then multiply the remainder by 25. Example: need $60k/year, pension provides $20k, gap is $40k × 25 = $1M target. Pensions dramatically reduce the savings requirement.
Generally no. The 25x rule applies to liquid investments (401k, IRA, brokerage). Your home equity provides housing but not income unless you downsize or use a reverse mortgage. Count it as a safety net, not retirement income.
The 4% rule already adjusts for inflation: you withdraw 4% in year 1, then increase that dollar amount by inflation each year. If you start with $40,000 and inflation is 3%, year 2 withdrawal is $41,200, year 3 is $42,436, etc.
Important Disclaimer — Not Financial Advice
The results from this calculator are for informational and educational purposes only. They are not a guarantee of actual outcomes and should not be considered financial, investment, tax, or legal advice. Always consult a qualified professional for advice tailored to your specific financial situation. See our Terms of Service and Privacy Policy for more information.
Last reviewed by Qasem Mohammed — May 31, 2026
AI & Software Engineer, Founder & Lead Developer at QFINHUB · Editorial Policy