How much do I need to retire? Why one number isn’t the whole story
How much do I need to retire? Why one number isn’t the whole story
Discover how to calculate how much you need to retire — then go beyond the number with smarter retirement planning strategies
How much do I need to retire? Why one number isn’t the whole story
Discover how to calculate how much you need to retire — then go beyond the number with smarter retirement planning strategies

Explore flexible strategies and tools to plan how much you need to retire with confidence.
Key takeaways
One rule of thumb is to plan on needing between 70% and 80% of your pre-retirement income after you retire.
Americans put the “magic number” for retirement at over $1M – saying they’ll need a target of $1,058,547, on average.
Average retirement savings by age offer a benchmark, but a personalized plan may be more effective for reaching your goals
“How much do I need to retire?” It’s one of the most common — and most important — questions people ask when thinking about their financial future. Having a target number in mind can help people feel more prepared for retirement, providing a concrete goal. One rule of thumb is to plan on needing between 70% and 80% of your pre-retirement income after you retire. According to Empower research, Americans say they’ll need $1,058,547 saved to retire.
Read more: Can $1 million last through retirement?
More than just a number
But here's the catch: There’s no single “magic number” that works for everyone. Your ideal retirement savings depends on a range of factors, from your lifestyle expectations and time horizon to how long you might live and how the markets behave.
This article offers a framework for estimating how much might be needed to retire — a ballpark figure that can serve as a starting point. While useful, that number isn’t definitive. Retirement planning involves more than a single target, and tools like Monte Carlo simulations can provide clarity by accounting for the uncertainties of life.
How much do I really need to retire?
Most people have a retirement number in mind. It helps create a concrete goal and provides a sense of security. That number might be based on a percentage of pre-retirement income (such as 70%–80%) or savings benchmarks tied to age.
Retirement savings by age
Here are some potential benchmarks:
Age | Recommended savings | Explanation |
30 | 1x your annual salary | Begin building momentum; compounding is on your side. |
35 | 2x your annual salary | Midway through early career; continue prioritizing saving. |
40 | 3x your annual salary | Time to evaluate progress and possibly adjust contributions. |
45 | 4x your annual salary | Aim to accelerate savings rate through investing. |
50 | 6x your annual salary | Peak earning years - maximize 401(k) catch-up contributions. |
55 | 7x your annual salary | Revisit your goals and consider long-term care needs. |
60 | 8x your annual salary | Refine your retirement timeline and strategy. |
67 | 10x your annual salary | Typical full retirement age; ideally financially prepared for retirement. |
Read more: Average retirement savings by age
How Monte Carlo simulations help personalize your plan
According to Empower research, Americans say retirement happiness a combination of affording joyful experiences, enjoying a high-quality of life, and reaching savings milestones. Setting up for a successful retirement also means anticipating (and planning for) the unexpected.
Monte Carlo simulations are mathematical analyses that can help to add the necessary nuance to retirement planning. These analyses attempt to make sense out of ambiguity and random variables that you could face between now and retirement, and into your retirement years, giving you insights to help you plan accordingly.
For example, let’s say you want to retire at 65, you want to maintain your current lifestyle throughout your lifetime, and you want to do so using the assets you’ve already accumulated. A Monte Carlo simulation will run thousands of hypothetical scenarios (considering market fluctuations, interest rates, projected spending, portfolio allocation, etc.) and combines those possibilities with your desired and planned cash flows. In the end, you will receive a probability-of-success ranking of low, medium or high.
Depending on your probability of success, you can model different retirement plans to increase your estimated chances of meeting your retirement goals.
Try it now: Get started with the free Empower Retirement Planner
What if you retire earlier or save a little bit less? How could a recession impact your portfolio? How could inflation rates affect your purchasing power? With a Monte Carlo simulation, you can see how a new scenario stacks up to your current plan with a side-by-side comparison.
Ways to improve your retirement outlook
If your simulation shows a lower probability of success, you have levers to pull. Consider adjusting:
- Your savings rate: Increase monthly 401(k) or IRA contributions.
- Your spending habits: Review your budget to find areas where you can spend less to save more.
- Your investment strategy: Reassess your risk tolerance and asset allocation.
- Your income mix: Explore new or additional income streams.
- Your expectations: Consider working longer, part-time work in retirement, reducing expenses, or moving somewhere with a lower cost-of-living.
- Your tax planning: Consider working with a tax professional to find strategies to potentially increase your after-tax-returns.
Every adjustment can increase your chances of meeting your retirement goals—or at least help you adapt to what’s realistic.
Read more: The best U.S. states for retirement
The bottom line
Whether retirement is decades away or just around the corner, understanding the variables that influence long-term financial readiness can help support a more adaptable, resilient plan. Monte Carlo simulations and other forecasting tools can help bring clarity — and confidence — to an otherwise complex question.
While it’s helpful to have a ballpark number in mind, you should be prepared to adjust your retirement plan over time and anticipate the unexpected. Review your retirement plan at least annually so you can make course corrections if needed and consider consulting with a financial professional on retirement savings.
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