How Much Money Do I Actually Need to Save for Retirement? (2026 Guide)

When it comes to retirement planning, "How much do I need?" is the million-dollar question—sometimes quite literally.

The truth is, there is no single "magic number" that works for everyone. The amount you need to save depends entirely on how you want to live and when you plan to stop working.

However, you don't have to guess. By understanding a few simple financial models, you can calculate an accurate target for your own lifestyle. In this guide, we'll break down the most reliable rules of thumb and show you how to find your target number using our **Free Retirement Calculator**.

The Rule of 25 (The 4% Rule)

If you only remember one concept from this guide, make it The Rule of 25.

It traces back to the 1998 paper widely known as the "Trinity Study," in which three Trinity University finance professors backtested how much of a portfolio a retiree could safely withdraw each year without running out of money. Their headline finding: historically, withdrawal rates of 3% to 4% were extremely unlikely to exhaust a stock-and-bond portfolio over a 30-year retirement. Flip that 4% withdrawal rate around and you get the Rule of 25: to fund a year of spending at a 4% draw, you need roughly 25 times your anticipated annual retirement expenses saved (because 1 ÷ 0.04 = 25).

Once you have that amount saved and invested in a diversified mix of stocks and bonds, the rule suggests you can withdraw about 4% of your portfolio in your first year of retirement, then adjust that dollar amount upward for inflation each subsequent year, with a high probability of the money lasting roughly 30 years. It's a planning guideline, not a guarantee — sequence-of-returns risk (a bad market early in retirement) and longer time horizons can both weaken it.

How to Calculate It

In this scenario, your target retirement number is $1.5 million.

The Fidelity Age-Based Benchmarks

If multiplying your expenses by 25 feels too abstract, Fidelity Investments publishes a popular age-based rule of thumb pegged to your current salary. According to Fidelity's retirement guidelines, you should aim to have saved the following multiples of your salary by each milestone:

* Age 30: 1x your salary

* Age 40: 3x your salary

* Age 50: 6x your salary

* Age 60: 8x your salary

* Age 67: 10x your salary

Example: If you earn $80,000 a year, the goal is to have $80,000 saved by age 30, $240,000 by age 40, and $800,000 by age 67.

To actually hit those marks, Fidelity recommends saving at least 15% of your pre-tax income each year — including any employer match — across your working life. So if your workplace plan matches 3%, you'd contribute 12% yourself to reach the 15% target.

Note: These benchmarks assume you retire around age 67 (the full Social Security retirement age for anyone born in 1960 or later) and that Social Security will replace part of your income. Fidelity's own modeling assumes your savings need to cover roughly 45% of pre-retirement income, with Social Security and other sources covering the rest. If you plan to retire much earlier — as in the FIRE movement — these multiples will be too low for you.

The 80% Replacement Rate Rule

Another common method financial advisors use is the 80% rule. This suggests that you'll need to generate 80% of your pre-retirement income to maintain your standard of living after you stop working.

Why 80% and not 100%? Because in retirement, you're no longer paying payroll taxes, you're no longer saving for retirement, and work-related expenses (commuting, professional wardrobes) disappear.

How to Calculate It

If your final salary before retirement is $100,000, you should aim to generate $80,000 a year in retirement.

You can subtract expected Social Security or pension income from that $80,000. If Social Security covers $25,000, you only need your portfolio to generate $55,000 a year. (Applying the Rule of 25 to that $55,000 gives you a target portfolio of $1.375 million.)

The 80% figure is a starting point, not a law. If you plan to travel extensively, support family members, or carry a mortgage into retirement, you may need 90%–100% of your old income. If you'll have a paid-off home and a frugal lifestyle, 70% might be plenty. The replacement rate is most useful as a quick sanity check against the Rule of 25 — if both methods land near the same number, you can be more confident in your target.

Variables That Change Your Target

Before you lock in your target number, consider these crucial wildcards:

1. Healthcare Costs

Healthcare is often one of the largest expenses in retirement, especially if you retire before Medicare eligibility begins at age 65. And the costs don't stop once Medicare kicks in. Fidelity's 2025 Retiree Health Care Cost Estimate projects that a 65-year-old retiring in 2025 will spend an average of $172,500 on health care over the rest of their life — and that's per person, so a couple should plan for roughly double. Notably, that estimate still excludes most dental care and long-term care (such as a nursing home or in-home aide), which can run into six figures on their own. Many planners suggest earmarking a dedicated slice of your portfolio, or a Health Savings Account, specifically for these costs.

2. Inflation

A dollar today will buy noticeably less two decades from now, so any honest retirement projection has to assume prices keep rising. The Federal Reserve targets 2% annual inflation over the long run, as measured by the personal consumption expenditures (PCE) price index, which makes 2% a reasonable baseline for forward-looking planning. That said, realized inflation has run meaningfully higher in some years, so building in a cushion above 2% is prudent — and remember that healthcare and housing costs have historically risen faster than the overall average. Our calculator lets you stress-test different inflation assumptions so you can see how sensitive your target is.

3. Early Retirement (FIRE)

The Rule of 25 (the 4% rule) was built around a roughly 30-year retirement. If you plan to retire at 45 and need your money to last 40 or 50 years, you need to be more conservative, because there are far more market cycles in which an early run of bad returns can permanently dent your portfolio. Many in the FIRE (Financial Independence, Retire Early) community use a larger multiplier of 30x to 33x their annual expenses — which equates to a more cautious 3% to 3.3% withdrawal rate — to give the portfolio more room to recover.

How to Get Started Today

The sheer size of a retirement target (often crossing into the millions) can be paralyzing. The secret is to stop looking at the top of the mountain and just calculate your next step.

Here is what you should do right now:

The best day to start saving for retirement was 20 years ago. The second best day is today. Because of compound growth, the dollars you invest in your 20s and 30s do the heaviest lifting — they have the most time to grow.

This article is general educational information, not financial, tax, or investment advice. The rules of thumb described here are simplifications and may not fit your situation. Investment returns are not guaranteed and you can lose money. Tax rules, Social Security, and Medicare provisions change over time. Consider consulting a qualified financial professional before making decisions about your retirement.