How much do I need to retire?
There's no single magic number — but there are simple rules that get you close. This guide walks through the three approaches financial planners actually use, gives you age-by-age targets for retiring at 50, 55, 60, 62 and 65, shows worked examples in pounds and dollars, and explains why your spending matters far more than your salary.
Key takeaways
- Your retirement number is driven by annual spending, not salary — start there.
- The 25x rule is the fastest estimate: annual spending × 25 = target portfolio.
- Retiring earlier needs a bigger multiple: roughly 30–33x at 50, 28x at 55, 25x at 60–65.
- State Pension or Social Security can cut the private pot you need by 30–50%.
- Always check the inflation-adjusted figure — a million in 30 years buys roughly half what it does today.
Start with what you'll spend, not what you earn
The biggest mistake people make when estimating their retirement number is anchoring on their current salary. What actually matters is your annual spending in retirement. Salary stops; spending continues.
Add up your essentials (housing, food, utilities, healthcare, insurance), then layer in lifestyle costs (travel, hobbies, gifts, dining out). Many planners use 70% of pre-retirement income as a default, but your number could be 50% or 110% — it depends on your mortgage, children, and how you want to live.
Two things usually fall away at retirement: pension or 401(k) contributions, and commuting or work costs. Two things usually rise: healthcare, and discretionary spending in the first decade — the so-called "go-go years", when travel and hobbies peak before slowing in your late seventies.
| Spending category | Typical direction in retirement | Why |
|---|---|---|
| Housing | Down sharply if the mortgage is cleared | Often the single largest pre-retirement cost |
| Pension contributions | Stops entirely | Frequently 8–15% of gross pay |
| Commuting and work costs | Down | Travel, lunches, clothing |
| Healthcare and insurance | Up | Especially in the US before Medicare at 65 |
| Travel and leisure | Up for the first 10–15 years | The 'go-go years' before spending tapers |
| Care costs | Up late in retirement | The biggest uninsured risk in most plans |
Rule 1: The 25x rule
Multiply your expected annual retirement spending by 25. That's your target portfolio. It comes from the 4% safe-withdrawal rule — withdrawing 4% of a balanced portfolio each year has historically lasted at least 30 years.
- Spend £40,000/yr → target £1,000,000
- Spend £60,000/yr → target £1,500,000
- Spend £80,000/yr → target £2,000,000
The crucial refinement most articles skip: you only need 25x the spending your own portfolio has to fund. Subtract guaranteed income first.
Both plan to spend £45,000 a year. Household A retires at 67 and expects £15,000 a year of State Pension or Social Security between them. Their portfolio only needs to cover £30,000 a year → £750,000.
Household B retires at 55 with no state income for 12 years. They need the full £45,000 from the portfolio, at a safer 3.5% rate → £1,290,000.
Identical lifestyles, a £540,000 difference — driven entirely by retirement age and guaranteed income.
Rule 2: Salary multipliers by age
Fidelity's widely-cited benchmarks suggest you should have saved a multiple of your salary by each decade:
- By age 30: 1× salary
- By age 40: 3× salary
- By age 50: 6× salary
- By age 60: 8× salary
- By age 67: 10× salary
These are useful checkpoints to see whether you're on track — not a personalised plan. They assume you save consistently from your mid-twenties, retire at 67, and replace about 45% of pre-retirement income from savings with the rest coming from the state. If any of those differ for you, treat them as a rough temperature check and use the spending-based rules for the real number.
| Age | Multiple of salary | On £50,000 salary | On £80,000 salary |
|---|---|---|---|
| 30 | 1× | £50,000 | £80,000 |
| 40 | 3× | £150,000 | £240,000 |
| 50 | 6× | £300,000 | £480,000 |
| 60 | 8× | £400,000 | £640,000 |
| 67 | 10× | £500,000 | £800,000 |
Rule 3: Work backwards from your desired income
If you want £5,000/month in retirement income, you need roughly £1,500,000 invested (because £1,500,000 × 4% ÷ 12 = £5,000). The strength of this approach is that it converts a scary lump sum into a tangible lifestyle.
The shortcut: monthly income × 300 = portfolio needed (that's 12 months × 25). Use 340 instead of 300 if you're retiring before 55, to reflect a safer 3.5% withdrawal rate.
| Monthly income wanted | At 4% (25x) | At 3.5% (28.5x) | At 3.25% (early retirement) |
|---|---|---|---|
| £2,000 | £600,000 | £686,000 | £738,000 |
| £3,000 | £900,000 | £1,029,000 | £1,108,000 |
| £4,000 | £1,200,000 | £1,371,000 | £1,477,000 |
| £5,000 | £1,500,000 | £1,714,000 | £1,846,000 |
Don't forget inflation
£1,000,000 in 30 years won't buy what £1,000,000 buys today. At 2.5% inflation, prices roughly double every 28 years. Our calculator shows both the nominal (future) and inflation-adjusted (today's money) projections so you can see the real picture.
Practically, this means your target should be set in today's money and then the projection inflated to meet it. A £1,000,000 pot in 25 years at 2.5% inflation is worth about £539,000 today; over 30 years, about £477,000. If you plan against the headline number you'll overestimate your lifestyle by nearly half.
How much do I need to retire at 50?
Retiring at 50 typically needs 30–33x your annual spending, because your money may need to last 40+ years — well beyond the 30-year window the 4% rule was built for. A safer withdrawal rate at this age is closer to 3.0%–3.3%.
- Spend £30,000/yr → target £1,000,000
- Spend £40,000/yr → target £1,200,000–£1,350,000
- Spend £60,000/yr → target £1,800,000–£2,000,000
Retiring at 50 also creates an access problem, not just a size problem. UK pensions can't be touched until 55 (57 from April 2028) and US 401(k)s until 59½ (or 55 under the Rule of 55), so a meaningful slice of your money has to sit in an ISA, taxable brokerage account or cash to bridge the gap. A rough guide: hold 5–10 years of spending outside locked-up pensions.
You'll also need a plan for healthcare (ACA in the US to 65; private cover in the UK to 66) and a bridge to State Pension or Social Security. See our early retirement guide: FIRE — Financial Independence, Retire Early.
How much do I need to retire at 55?
Use a 28x multiplier on annual spending — a 3.5% withdrawal rate suits a 35–40 year retirement.
- Spend £40,000/yr → target £1,100,000–£1,200,000
- Spend £60,000/yr → target £1,700,000–£1,800,000
55 is the age where the rules start working in your favour. UK savers reach the Normal Minimum Pension Age (rising to 57 in April 2028), and US savers who leave an employer in or after the year they turn 55 can draw from that employer's 401(k) penalty-free under the Rule of 55 — though not from an IRA.
Country-specific guides: Can I retire at 55 in the UK? and Can I retire at 55 in the US? (Rule of 55, 401(k)/IRA access, ACA cover).
How much do I need to retire at 60?
Fidelity's benchmark is 8x salary saved by 60. Using the 25x spending rule:
- Spend £40,000/yr → target £1,000,000
- Spend £50,000/yr → target £1,250,000
- Spend £70,000/yr → target £1,750,000
At 60 you're typically funding a 6–7 year gap before State Pension (66/67) or a 7 year gap before Full Retirement Age Social Security. Model those years separately: spending is usually highest in that window, so a plan that looks tight on average can be comfortable once state income starts.
How much do I need to retire at 62?
62 is the earliest US Social Security claim age (with a permanent ~30% reduction vs Full Retirement Age). For UK savers, 62 is still 5 years short of State Pension. Target roughly 25x spending from your own portfolio, with State Pension or Social Security topping up from 66–67.
- Spend £50,000/yr → target £1,250,000
- Spend £80,000/yr → target £2,000,000
The real decision at 62 isn't the pot size — it's whether to claim early. Claiming at 62 locks in a permanently smaller benefit for life, and for a married couple it can also reduce the survivor benefit. Many households are better off spending down the portfolio slightly faster from 62 to 67 in order to delay the claim.
US readers: read our Social Security claiming guide before locking in 62 — delaying to 67 or 70 usually wins.
How much do I need to retire at 65
By 65, Fidelity suggests 10x salary. Using spending:
- Spend £40,000/yr → target £1,000,000
- Spend £60,000/yr → target £1,500,000
State Pension (UK, from 66/67) or Social Security (US, at Full Retirement Age 67) will cover a substantial portion — for many households, 30–50% of retirement income.
| Retirement age | Safe withdrawal rate | Multiple of spending | Target on £40,000/yr |
|---|---|---|---|
| 50 | 3.0–3.3% | 30–33× | £1,200,000–£1,350,000 |
| 55 | 3.5% | 28× | £1,120,000 |
| 60 | 3.75–4% | 25–27× | £1,000,000–£1,080,000 |
| 62 | 4% | 25× | £1,000,000 |
| 65 | 4% | 25× | £1,000,000 |
Putting it all together
Three rules, one goal: a clear retirement target. Estimate your annual spending, subtract any guaranteed income, multiply what's left by the factor for your retirement age, then check the figure in today's money rather than the headline nominal balance.
Plug your numbers into the Retiris Finance calculator and you'll see exactly how much you'll have at retirement, and what monthly income that supports. If you're aiming for early retirement, see our guides on retiring at 55 in the UK and retiring at 55 in the US, and avoid the common pitfalls in 10 retirement mistakes to avoid.
Your action steps
- 1Write down your expected annual retirement spending in today's money — essentials first, then lifestyle.
- 2Subtract any guaranteed income (State Pension, Social Security, defined benefit pension, rental income).
- 3Multiply the remainder by the factor for your target age: 30–33× at 50, 28× at 55, 25× from 60.
- 4Check how much of your money is accessible before pension age, and top up an ISA or taxable account if the bridge is short.
- 5Run the projection in our calculator and read the inflation-adjusted figure, not the nominal one.
- 6Re-run it every year, and after any pay rise, job change or change of retirement date.
Frequently asked questions
How much do I need to retire at 50?▾
Retiring at 50 typically requires 30–33x your annual spending because your retirement could last 40+ years. Someone spending £/$40,000/yr should target £/$1.2M–£/$1.35M. You'll also need to bridge to State Pension (67) or Social Security (62), plus cover private health costs pre-Medicare (US) or pre-NHS-age (UK).
How much do I need to retire at 55?▾
The common benchmark is 28x annual spending. Spend £/$40,000/yr and you're targeting £/$1.1M–£/$1.2M. UK savers can access a private pension from 55 (57 from April 2028); US savers can use the Rule of 55 for their most recent 401(k). See our dedicated guides for the UK and US.
How much do I need to retire at 60?▾
Fidelity's benchmark is 8x salary saved by 60 — someone earning £/$80,000 targets around £/$640,000. Using the 25x rule on spending is more accurate: £/$40k/yr of spending needs about £/$1M.
How much do I need to retire at 62?▾
In the US, 62 is the earliest Social Security claim age (with a permanent ~30% reduction). A rough target is 10x salary or 25x annual spending — for £/$50k/yr spending, that's £/$1.25M, before Social Security or State Pension.
How much do I need to retire at 65?▾
By 65, Fidelity suggests 10x salary saved. On the spending side, 25x annual spending remains the anchor. Someone spending £/$50,000/yr targets £/$1.25M — with State Pension (UK) or Social Security (US) filling much of the gap.
Is 1 million enough to retire?▾
For many households, yes — using the 4% rule, 1 million in savings supports roughly 40,000 a year in pre-tax income. Whether that's comfortable depends on your spending, your other income sources (like State Pension or Social Security), and where you live.
How much do I need to retire on 3,000 a month?▾
Multiply by 12 then by 25: 3,000 a month is 36,000 a year, so around 900,000 invested. If State Pension or Social Security covers 1,000 a month of that, your own portfolio only needs to produce 24,000 a year — about 600,000.
What's the 70% rule for retirement?▾
It assumes you'll need roughly 70% of your pre-retirement income each year to maintain your lifestyle. Some retirees need more (active travel years), some need less (mortgage paid off, lower taxes).
Does this include State Pension or Social Security?▾
No — our calculator estimates your private savings only. Add expected State Pension, Social Security, workplace pension, or rental income on top when working out your true retirement income.
How much should I have saved by 40?▾
A common checkpoint is 3x salary by 40 and 6x by 50. If you're behind, the two levers that move fastest are raising your contribution rate and delaying retirement by two or three years — both compound far harder than chasing higher returns.