Retirement planning isn’t one-size-fits-all—and the amount you need to retire comfortably depends on your lifestyle, location, and financial goals. In 2025, with rising costs of living, it’s essential to plan carefully to achieve financial independence.
Here’s how to calculate your retirement number—and what you really need to live well in retirement.
🧮 1. The 25x Rule (Quick Estimate)
A commonly used rule in the Financial Independence, Retire Early (FIRE) movement:
👉 Annual Expenses × 25 = Your Retirement Number
For example, if you expect to spend $60,000/year in retirement:
$60,000 × 25 = $1.5 million
This is based on the 4% rule, which suggests you can safely withdraw 4% of your nest egg annually without running out of money.
💡 2. Factors That Affect How Much You’ll Need
Your specific retirement number depends on several key factors:
🔹 Your Desired Lifestyle
- Travel, dining out, or a second home will increase costs.
- A simple lifestyle focused on hobbies and low living costs will reduce it.
🔹 Where You’ll Live
- Urban areas like New York, San Francisco, or LA have high costs.
- Consider retiring in lower-cost states such as Florida, Texas, or North Carolina for a more affordable lifestyle.
🔹 Health Care Costs
- Healthcare is a major expense in retirement, often exceeding $300,000 for a couple over their lifetime.
- Make sure to factor in Medicare premiums and out-of-pocket costs.
🔹 Retirement Age
- The earlier you retire, the more you’ll need saved, as you’ll be drawing from your savings for a longer period.
🧾 3. Sources of Retirement Income
You likely won’t rely 100% on your savings. Consider the following potential income sources:
- Social Security (average monthly benefit in 2025: $1,900)
- 401(k) / IRA savings
- Pensions (if you’re fortunate to have one)
- Rental or passive income
- Side work or consulting during semi-retirement
💼 4. How to Know You’re On Track
To gauge your retirement readiness, aim for these savings targets as you approach retirement age:
- By age 30 → 1x your annual salary saved
- By age 40 → 3x your annual salary saved
- By age 50 → 6x your annual salary saved
- By age 60 → 8–10x your final annual salary saved
- By retirement (65–67) → 10–12x your final annual salary saved
These are rough guidelines based on industry standards like Fidelity’s retirement benchmarks.
📊 5. Use a Retirement Calculator
To get a more personalized retirement number, use these online tools to project your future savings:
- NerdWallet Retirement Calculator
- Fidelity Retirement Score
- Empower’s (Personal Capital) Planning Tools
These tools can help you create a realistic plan by inputting your age, income, savings, and spending.
✅ Final Thoughts
There’s no one-size-fits-all retirement number—the key is to set a target, track your progress, and stay consistent with your savings and investing strategies.
Whether your retirement goal is $500K or $2 million, planning early will give you the confidence and flexibility to enjoy your golden years.
Remember: Retirement isn’t about hitting a certain age. It’s about achieving a financial number that supports your dream lifestyle.
Start building your retirement number today!
📈 Related Resources to Help You Plan:
Need investment advice? Learn about Roth IRAs and 401(k) strategies.
Check out NerdWallet’s Retirement Planning Guide for expert tips.