How much money do I need to retire?

Multiply your annual expenses by 25. That is the standard answer using the 4% safe withdrawal rule. If you spend $40,000 per year, you need $1,000,000. If you spend $60,000, you need $1,500,000. If you spend $100,000, you need $2,500,000. This formula has been tested against over 100 years of market data and works for 30-year retirements about 95% of the time.

Can I retire with $1 million?

At a 4% withdrawal rate, $1 million supports $40,000 per year in spending. Whether that is enough depends on where you live, whether your housing is paid off, your healthcare costs, and your lifestyle. In a low-cost city with a paid-off house and no debt, $40,000 per year is comfortable. In a high-cost city with a mortgage, it is very tight. The question is not whether $1 million is enough but whether $40,000 per year covers your actual expenses.

How much do I need to retire at 40?

The same formula applies: annual expenses times 25. A 40-year-old retiree may want to use a 3.5% withdrawal rate instead of 4% because their money needs to last 50+ years instead of 30. At 3.5%, multiply expenses by 28.6 instead of 25. For $50,000 annual expenses, that means $1,430,000 instead of $1,250,000. The extra $180,000 provides safety for the longer retirement.

Does Social Security reduce how much I need?

If you plan to claim Social Security at 62-67, it reduces the amount you need from your portfolio. If Social Security provides $2,000/month ($24,000/year), your portfolio only needs to cover the remaining expenses. For $50,000 annual spending minus $24,000 Social Security, your portfolio needs to support $26,000/year, which requires $650,000 at 4% SWR instead of $1,250,000. But early retirees cannot claim Social Security until 62, so you need full coverage until then.

What about inflation?

The 4% rule already accounts for inflation. The Trinity Study methodology is: withdraw 4% of your portfolio in year one, then increase that dollar amount by inflation each subsequent year. If you withdraw $40,000 in year one and inflation is 3%, you withdraw $41,200 in year two. Using 7% expected returns instead of the nominal 10% also accounts for inflation by using real (inflation-adjusted) returns.

How Much Money Do You Need to Retire? The Real Math Behind Early Retirement

Q: Can I retire with $500,000?

At 4% withdrawal, $500,000 supports $20,000 per year. That is extremely frugal and only works in very low-cost areas, with a fully paid-off home, minimal healthcare costs, and no dependents. Some Lean FIRE practitioners manage it in rural areas or by living abroad in countries with low cost of living. But $500,000 leaves almost no margin for unexpected expenses.

Last updated: April 202610 min readCalculator Tools

Multiply your annual expenses by 25. That is how much you need. If you spend $50,000 per year, you need $1,250,000. If you spend $30,000, you need $750,000. If you spend $100,000, you need $2,500,000. This comes from the 4% rule — withdrawing 4% of your portfolio annually has historically survived 30-year retirements about 95% of the time.

The FIRE calculator does this math instantly with your real numbers, plus projects how many years it takes to get there based on your current savings and income.

The Quick Answer Table

Monthly Spending	Annual Spending	Portfolio Needed (4% SWR)	Portfolio Needed (3.5% SWR)
$2,000	$24,000	$600,000	$685,714
$2,500	$30,000	$750,000	$857,143
$3,000	$36,000	$900,000	$1,028,571
$3,500	$42,000	$1,050,000	$1,200,000
$4,000	$48,000	$1,200,000	$1,371,429
$5,000	$60,000	$1,500,000	$1,714,286
$6,000	$72,000	$1,800,000	$2,057,143
$7,500	$90,000	$2,250,000	$2,571,429
$10,000	$120,000	$3,000,000	$3,428,571
$15,000	$180,000	$4,500,000	$5,142,857

The 3.5% SWR column is for people retiring before 45, where the money needs to last 40-50+ years. The 4% column works for traditional retirements and early retirees willing to accept slightly more risk.

Why Expenses Matter More Than Income

Two people. Same question: "How much do I need to retire?"

	Person A	Person B
Income	$200,000/year	$65,000/year
Annual expenses	$150,000	$30,000
FIRE number (4% SWR)	$3,750,000	$750,000
Savings rate	25%	54%
Years to FIRE	~32 years	~14 years
Retires at age (starting at 25)	57	39

Person B earns less than half of Person A but retires 18 years earlier. The amount you need to retire is driven entirely by what you spend, not what you earn. A high income without expense control is just a bigger number on a paycheck that flows right back out.

Can I Retire With...

$500,000

At 4% withdrawal: $20,000/year ($1,667/month). This works if you own a home free and clear in a low-cost area and have very low expenses. Some people make it work by retiring abroad — $20,000/year goes far in Thailand, Portugal, or Mexico. For a single person in a paid-off home in rural US, it is tight but possible. For a family in any major metro, no.

$750,000

At 4% withdrawal: $30,000/year ($2,500/month). Lean FIRE territory. Works in low-to-moderate cost areas with simple living. A single person or frugal couple in a paid-off home in the Midwest, South, or a small city can live on this. Healthcare is the wild card — ACA marketplace premiums can eat $500+/month of this budget.

$1,000,000

At 4% withdrawal: $40,000/year ($3,333/month). The "classic" FIRE number. Comfortable in most mid-cost US cities. Covers housing (rent or mortgage-free property taxes/insurance), food, transportation, healthcare, and some travel. Not luxurious, but sustainable. This is what most r/financialindependence members target as a minimum.

$1,500,000

At 4% withdrawal: $60,000/year ($5,000/month). Regular FIRE with breathing room. Comfortable in all but the most expensive cities. Regular travel. No budget anxiety. This is the sweet spot for many early retirees who want financial freedom without extreme frugality.

$2,500,000

At 4% withdrawal: $100,000/year ($8,333/month). Fat FIRE. Live in any US city. Travel frequently. Nice housing. No financial compromises. Typically requires sustained high income ($200K+) and 15-20 years of disciplined saving.

Find out exactly how much YOU need based on your spending.

Calculate Your Number →

The Expenses People Forget

The number one reason retirement plans fail is underestimating expenses. When calculating your annual spending, include all of these:

Healthcare ($4,000-$18,000/year). Before 65, you pay full price for health insurance. ACA marketplace plans for a couple can run $12,000-18,000/year depending on age and location. After 65, Medicare covers most costs, but supplemental insurance adds $2,000-4,000/year.
Property taxes and home maintenance ($3,000-12,000/year). A paid-off house is not free housing. Property taxes, insurance, and maintenance (roof, HVAC, plumbing) still cost $250-1,000/month.
Transportation ($3,000-8,000/year). Even with a paid-off car: insurance, gas, maintenance, registration, and eventual replacement. Budget $250-650/month.
Income taxes ($0-15,000/year). 401k and traditional IRA withdrawals are taxed as ordinary income. If you withdraw $50,000, you owe federal and possibly state income tax. Roth withdrawals are tax-free, which is why Roth conversion ladders are popular in FIRE planning.
Inflation adjustments. If you retire at 40 on $40,000/year, that $40,000 needs to grow each year to maintain purchasing power. At 3% inflation, you need $48,600 in year 7 and $72,000 by year 20 to buy the same things.

How Long Until You Have Enough

The FIRE calculator projects your exact timeline based on current savings, monthly contributions, and expected returns. But here are general timelines by savings rate:

Savings Rate	Years to $750K*	Years to $1.25M*	Years to $2.5M*
20%	28 years	35 years	42 years
30%	22 years	28 years	35 years
40%	17 years	22 years	29 years
50%	14 years	17 years	24 years
60%	11 years	14 years	20 years
70%	8 years	11 years	16 years

*Starting from $0, 7% real return. Existing savings shorten these significantly.

These numbers explain why the FIRE community obsesses over savings rate. The difference between 30% and 50% cuts 11 years off the timeline to $1.25M. No investment strategy change provides that kind of acceleration.

The Bottom Line

The answer to "how much do I need to retire?" is a math problem, not an opinion. Track your spending for 3 months. Multiply annual expenses by 25 (or 28.6 for a conservative plan). That is your number. Then use the FIRE calculator to see how many years it takes to get there at your current savings rate.

If the timeline is too long, there are only three levers: earn more, spend less, or accept more risk (higher withdrawal rate or more aggressive investments). Our Lean vs Fat FIRE comparison can help you decide which spending level fits your goals.