Retirement Planning: Building a Nest Egg That Lasts

How Much Do You Need to Retire?

The amount you need depends on several factors: your desired lifestyle in retirement, where you plan to live, expected healthcare costs, and whether you have other income sources like pensions or Social Security.

A widely used guideline is the 4% rule: if you withdraw 4% of your portfolio in your first year of retirement and adjust for inflation thereafter, your money has a high probability of lasting 30 years. This means you need approximately 25 times your annual retirement expenses.

For example, if you expect to spend $50,000 per year in retirement, you would aim for a portfolio of $1,250,000. If you plan to spend $30,000 per year, $750,000 may be sufficient.

How Much Should You Save Each Month?

The monthly savings amount depends on your current age, target retirement age, expected investment returns, and target nest egg. A general guideline is to save 10-15% of your gross income for retirement, but this may not be enough if you start later or have ambitious goals.

For illustration, to reach $1,000,000 by age 65 using a modeled 7% annual return:

• Starting at age 25: approximately $380/month
• Starting at age 35: approximately $850/month
• Starting at age 45: approximately $2,000/month
• Starting at age 55: approximately $5,800/month

These figures illustrate the effect of time and compounding. The 7% return is a planning assumption, not a forecast or promised return; test lower and higher assumptions before relying on the result.

The 4% Rule Explained

The 4% rule was developed by financial advisor William Bengen in the 1990s, based on historical market data. It suggests that a retiree can withdraw 4% of their portfolio in the first year of retirement, then adjust that amount for inflation each subsequent year, with a high probability that the portfolio will last at least 30 years.

The rule is based on historical portfolio research and is not a guarantee. Market conditions, sequence-of-returns risk, fees, taxes, and unexpected expenses can all affect outcomes. Lower rates such as 3%–3.5% can be used as stress-test scenarios for longer retirements, but they are not official recommendations.

Source: Stanford-hosted review of Bengen / Trinity withdrawal research.

Starting Retirement Savings at Different Ages

Starting in Your 20s

This is the longest compounding window in the examples on this page. Under a modeled 7% annual return, investing $300/month from age 25 to 65 could accumulate roughly $800,000, while total contributions would be $144,000. The return is an illustration, not a forecast.

Starting in Your 30s

You still have 30+ years for compounding to work. The required monthly contribution is higher than in your 20s, but still manageable for most incomes. Prioritize capturing any employer match in your retirement accounts.

Starting in Your 40s

While you have less time for compounding, 20-25 years is still a meaningful horizon. You may need to save a higher percentage of income (15-20% or more) and consider whether delaying retirement by a few years could significantly improve your outlook.

Starting in Your 50s

It is not too late, but the math becomes more challenging. The IRS allows additional catch-up contributions for eligible participants age 50 and over; for 2026, the general 401(k)/403(b)/governmental 457 catch-up limit is $8,000, with a higher $11,250 limit for eligible participants ages 60–63. Plan rules and tax circumstances vary. Source: IRS.

Inflation and Retirement

Inflation reduces purchasing power over time. As a simple scenario, maintaining the buying power of $50,000 of annual spending for 30 years at 3% inflation would require about $121,000 in nominal annual spending by year 30. The 3% rate is an assumption, not a forecast. The U.S. Bureau of Labor Statistics Consumer Price Index is a standard measure of changes in consumer prices. Source: BLS CPI.

This is why it is important to use inflation-adjusted projections and to ensure your retirement investments include assets that historically keep pace with inflation, such as stocks. Our inflation calculator can help you understand how inflation affects your purchasing power over time.

Try It Yourself

Use our retirement calculator to estimate your nest egg and a modeled fixed withdrawal amount. You can also use the savings goal calculator to determine how much you need to save each month to reach your target.

Open the Retirement Calculator → Calculate Your Monthly Savings Goal →

Risk & Limitations

Retirement projections assume constant rates of return, which do not reflect real-world market volatility. Sequence of returns risk — the order in which investment returns occur — can significantly affect retirement outcomes, especially in the early years of withdrawal. Taxes, healthcare costs, and unexpected expenses can also impact your plan. These projections are educational and hypothetical, not financial advice.