Money·3 min read

How Much Do I Need to Retire?

woman golfer smashing her piggy bank on the golf course
Design: theSkimm | Photo: iStock
March 26, 2021

The Story

Daydreaming about your post-work life is easy. Getting there takes, well, work.

And money.

Right. How much depends on what you want your retirement to look like. One rule of thumb is to plan to replace 70% to 80% of your pre-retirement salary each year. So if you earn $75K, you'd need up to $60K...times the number of years you'll be retired. (Hint: the avg woman in the US lives to about 81.)

What if I want to come up with my own estimate?

Go for it. Keep in mind that some of your expenses will be different later. Healthcare and travel costs may go up (hey, Bora Bora), while other expenses go down or disappear. Especially if you've paid off your mortgage, car, and student loans by then. If your retirement income puts you in a lower tax bracket than you are now, you'll also owe less in taxes. (Psst...some states don't tax retirement income at all.)

You may also be able to factor in Social Security income...fingers crossed. And you could fill your time – and wallet – with a part-time job or side hustle.

Once you've got an idea of how much you'll need each year, do the same math as above.

My number is...very large.

Don't panic. The good news is that you don't have to save it all. When you invest, your money has a chance to grow exponentially over time. And the earlier you start, the more you can have later. (Thanks, compounding.) Just try not to touch the money too soon. Future You says 'thanks for keeping your hands to yourself.'

Setting benchmarks can also help your goal feel more achievable. Fidelity breaks it down like this: aim to have one year's worth of salary set aside by age 30. Then three times your salary by 40, six times by 50, and eight (or more) times by the day you set your forever OOO message.

Related: The Best Investment Account for Every Money Goal

Is there anything I can do to speed things up?

Here are a few:

  • If your employer matches some of the money you put into your retirement account, try to contribute at least enough to max out their help. Free money is the best money.

  • Automate transfers so you can send money straight to your 401(k) or IRA – without ever seeing it in your checking account. That way, you'll never forget to contribute or accidentally spend that money elsewhere. Ask HR if you need help setting this up.

  • Be aggressive. You can change up your asset allocation to try and grow your money faster. Just remember: higher rewards = higher risks. Your call on whether it's worth it. 


There's no magic number everyone needs to hit to retire. Get a personal, reasonable target by looking at your current financial situation, and hitting imaginary fast forward to see how it could change over time. Then start investing to get where you want to go ASAP.

Want more info about saving for retirement? Get it here.

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