Retirement Planning · Savings
How Much Money Do I Need to Retire?
The Short Answer
A widely cited benchmark is 10 times your annual salary saved by age 67. But the benchmark assumes average spending and an average retirement. A more personal method: estimate your annual retirement spending, subtract expected Social Security and any pension, and divide the remaining gap by 0.04. That gives a target based on your actual life rather than a national average.
There is no single right number, and any source that gives you one without asking about your spending is guessing. The honest answer comes from your own expenses, your own income sources, and your own timeline. Here is how to calculate a figure that actually fits your situation.
Where does the 10x salary benchmark come from?
Fidelity's widely referenced guideline suggests saving about 10 times your annual income by age 67, with milestones along the way: 1x by 30, 3x by 40, 6x by 50, and 8x by 60.1 The benchmark assumes you will replace roughly 45% of pre-retirement income from savings, with Social Security covering much of the rest, and that retirement lasts into your early 90s.
It is a useful sanity check, but it is built on averages. Your health, your location, your other income, and the age you retire can move your real number substantially in either direction.
How do I calculate my personal number?
Start with what you actually spend, not what you earn. Most planners estimate retirement spending at roughly 70 to 80% of pre-retirement spending, because work costs and retirement contributions fall away, though travel and healthcare often rise.
Then subtract your guaranteed income. Take your estimated annual retirement spending, subtract expected annual Social Security and any pension, and the remainder is what your savings must produce. Divide that annual gap by 0.04 (the 4% withdrawal rule) to get your savings target.
| Step | Example |
|---|---|
| Annual retirement spending | $60,000 |
| Minus Social Security | -$24,000 |
| Minus pension | -$0 |
| Gap savings must cover | $36,000 |
| Divide by 0.04 | $900,000 target |
What changes the number most?
Four factors move it the most. Retiring earlier raises the target (a 62 retirement may need closer to 12x income, since savings must last longer and Social Security is smaller). Retiring later lowers it. Healthcare is the wild card: Fidelity estimates the average 65-year-old needs about $172,000 in after-tax savings for healthcare alone.2 And where you live can swing your cost of living dramatically.
When the benchmark misleads
The 10x rule can frighten people who have a pension or who will spend well below average, and it can lull people in high-cost areas into a false sense of security. Treat it as a starting reference, then build your real number from your own spending and income.
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Frequently asked questions
Is $1 million enough to retire?
It depends entirely on your spending and other income. At a 4% withdrawal rate, $1 million produces about $40,000 per year before Social Security. For someone spending $64,000 a year with $24,000 in Social Security, that works; for someone spending far more, it may not.
How much should I have saved by 60?
Fidelity's benchmark suggests about 8 times your annual salary by age 60, on the way to 10 times by 67. These are reference points, not requirements; your real target depends on your spending and income sources.
How much do I need for healthcare in retirement?
Fidelity estimates the average 65-year-old needs roughly $172,000 in after-tax savings for healthcare costs across retirement, separate from other expenses and not including long-term care.
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Sources
- How Much Do I Need to Retire? Fidelity Investments. The 10x-income benchmark and age-based savings milestones.
- How to Plan for Rising Health Care Costs Fidelity Investments. 2025 retiree health care cost estimate of $172,000 for the average 65-year-old.