How Much Do I Need to Retire?
The 4% rule says you need 25x your annual expenses to retire safely. But what if your dividends cover your expenses without selling a single share? Compare both approaches below.
Your Numbers
Your annual spending in today's dollars
Social Security, pension, side income
Traditional safe withdrawal rate (4% is standard)
For the dividend-only approach
You need this much saved, then withdraw 4% per year. Your principal slowly depletes.
You need this much in dividend stocks yielding 4%. Your principal stays intact — you never sell a share.
With a 4% dividend yield, your dividends cover your expenses without selling shares. Your portfolio stays intact and continues growing. That's the dividend advantage.
Portfolio Needed by Withdrawal Rate
Lower withdrawal rates require more savings but dramatically reduce the risk of running out of money.
Portfolio Needed by Dividend Yield
A higher dividend yield means you need less capital to cover the same expenses — but higher yields often come with higher risk.
Monthly savings estimates are simplified (no compounding). Actual required savings are lower with investment growth. This is for illustration only — not financial advice.
What's your retirement number, based on your salary?
| Current salary | 60% replaced | 70% replaced | 80% replaced | 90% replaced |
|---|---|---|---|---|
| $50,000 salary | $750,000 | $875,000 | $1,000,000 | $1,125,000 |
| $75,000 salary | $1,125,000 | $1,312,500 | $1,500,000 | $1,687,500 |
| $100,000 salary | $1,500,000 | $1,750,000 | $2,000,000 | $2,250,000 |
| $150,000 salary | $2,250,000 | $2,625,000 | $3,000,000 | $3,375,000 |
What percentage of my salary do I need in retirement?
Financial planners commonly target 70–80% of pre-retirement salary, because retirees stop paying payroll taxes, stop saving for retirement, and often shed commuting costs or a mortgage. The replacement rate moves the target dramatically: someone earning $100,000 needs $2,000,000 under the 4% rule at an 80% replacement rate, but $2,250,000 at 90% and only $1,750,000 at 70%. Frugal households with paid-off homes can plan near 60%; retirees expecting heavy travel or medical costs should plan near 90–100%.
How much do I need to retire on a $100,000 salary?
Using the 4% rule with an income-replacement approach, a $100,000 earner needs roughly $1,750,000 at a 70% replacement rate ($70,000 per year of retirement income), $2,000,000 at 80%, or $2,250,000 at 90% — each figure is the yearly income target multiplied by 25. Guaranteed income shrinks the target: every dollar of annual Social Security or pension income removes $25 from the portfolio requirement, so a $30,000 Social Security benefit cuts the 80%-replacement target from $2,000,000 to $1,250,000.
How does inflation change how much I need to retire?
A retirement number calculated in today's dollars understates what a future retiree must actually accumulate. The calculator above grows expenses by the inflation rate before applying the withdrawal rate: $60,000 of annual spending compounded at 3% inflation for 20 years becomes about $108,367 per year, which multiplied by 25 pushes the 4%-rule target from $1,500,000 in today's dollars to roughly $2.71 million in future dollars. The practical takeaway is to state the goal in today's dollars, then let contributions and investment returns — which historically outpace inflation — close the gap.
Does Social Security reduce how much I need to retire?
Substantially. The 4% rule only has to cover the gap between spending and guaranteed income, so subtract Social Security before multiplying by 25. A household spending $80,000 per year with a $30,000 combined Social Security benefit needs a portfolio covering just $50,000 — a $1,250,000 target instead of the $2,000,000 required with no benefit. Early retirees face a wrinkle: benefits start no earlier than age 62, so someone retiring at 50 must bridge a decade or more at the full $2,000,000-style number before the offset kicks in.
This tool is for educational and informational purposes only and does not constitute investment, financial, tax, or legal advice. Consult a licensed professional before making investment decisions.
Past performance does not guarantee future results. All projections are hypothetical estimates based on user-provided inputs and may differ materially from actual outcomes.
By using this tool you agree to our Terms of Service and Privacy Policy.