Key Takeaways
- The 4% rule suggests you can withdraw 4% of savings annually without running out
- Starting at 25 vs 35 can mean twice the retirement savings
- Aim to save 10-15% of gross income for retirement
- A $1 million nest egg provides roughly $40,000/year
- Don't forget Social Security - average benefit is $1,907/month
How Much Do You Need to Retire?
The amount you need depends on your desired lifestyle and expected expenses. A common rule is to have 25 times your annual expenses saved (based on the 4% withdrawal rule).
Retirement Savings Needed = Annual Expenses × 25
The Power of Starting Early
| Scenario | Start Age | Monthly | Contributed | Value at 65 |
|---|---|---|---|---|
| Early Saver | 25 | $400 | $192,000 | $1,068,048 |
| Late Starter | 35 | $400 | $144,000 | $489,383 |
| Catch-Up | 35 | $800 | $288,000 | $978,766 |
Retirement Savings Strategies
Maximize Employer Match
Always get your full 401(k) match - it's free money with 50-100% instant return.
Use Tax-Advantaged Accounts
Max out 401(k), IRA, and HSA for tax-deferred compounding.
Increase Contributions Annually
Boost savings by 1% each year - you'll barely notice but it adds up.
Delay Social Security
Waiting until 70 increases benefits by 8% per year after full retirement age.
Pro Tip: The 15% Rule
Save at least 15% of gross income for retirement (including employer match). If behind, aim for 20-25%.
Frequently Asked Questions
By 30: 1x salary. By 40: 3x. By 50: 6x. By 60: 8x. By 67: 10x your salary saved.
Withdraw 4% of savings in year one, then adjust for inflation. With $1M, withdraw $40,000 the first year. Has high probability of lasting 30+ years.
Get full 401(k) match first. Then pay high-interest debt (>7-8%). After that, balance retirement with remaining debt.
Generally at 59½. Earlier withdrawals face 10% penalty plus taxes. Exceptions include Roth contributions, Rule of 55, and hardship withdrawals.
Start Planning Your Retirement Today
Small changes now mean big differences later.