How Much Do I Need to Retire Comfortably in 2025?

zamrznutitonovi / Getty Images

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

If you’ve ever asked yourself how much do I need to retire comfortably, you’re not alone. The answer depends on your lifestyle, income, location and health — but financial experts agree on a few proven benchmarks that can help you find your number.

According to Fidelity’s 2025 Retirement Report, most Americans should save 25 times their annual expenses before retiring. That means if you plan to spend $70,000 a year, you’ll want a nest egg of about $1.75 million. Another common approach, known as the 4% rule, suggests withdrawing 4% of your savings each year to make your money last at least 30 years.

If you’re looking for quick guidance, here’s a snapshot of how much you may need to retire comfortably in 2025.

Quick Facts: How Much You Need to Retire in 2025

• Target savings: 25x your annual expenses
• Safe withdrawal rate: 4% per year, adjusted for inflation
• Average retirement savings (ages 65-74): $609,000
• Median savings: $200,000, meaning half of the retirees have less
• Lifetime healthcare cost (65-year-old couple): $315,000
• Income replacement goal: 70-80% of pre-retirement income

Key Retirement Savings Benchmarks

Before you can plan confidently for retirement, it helps to know the major benchmarks experts rely on.

These simple rules — from Fidelity’s 25x formula to the 4% withdrawal rate — give you a clear starting point for figuring out how much you’ll really need to retire comfortably.

Fidelity’s Rule of 25x Annual Expenses

Fidelity recommends saving 25 times your annual expenses to retire with confidence.

Example: If you spend $80,000 a year, you’ll need roughly $2 million saved before you stop working.

This formula assumes that your portfolio continues to earn returns that offset inflation — and that you maintain a sustainable withdrawal rate throughout retirement.

The 4% Rule Explained

The 4% rule, first introduced by financial planner William Bengen, remains a trusted benchmark for sustainable withdrawals. If you retire with $1 million, you could withdraw $40,000 in your first year and adjust annually for inflation.

Recent analysis from Morningstar suggests a 3.7% to 4% rate gives retirees the best chance to make their money last for 30 years, depending on market conditions.

Income Replacement Ratios

Another way to plan is by replacing 70 to 80% of your pre-retirement income.

For example, if you currently earn $100,000 per year, you’ll likely need $70,000 to $80,000 annually from savings, Social Security and any pensions to maintain your lifestyle.

How Much You’ll Need by Income Level

Factors That Affect How Much You Need to Retire

How much you’ll need for retirement isn’t one-size-fits-all.

Your lifestyle, life expectancy and even where you live can dramatically change your retirement target — so it’s important to factor in these key variables before setting your number.

1. Lifestyle Choices

Your retirement lifestyle has the biggest impact on your number.

• A modest lifestyle may require only 60 to 70% of your working income.
• A travel-filled or luxury lifestyle could demand 80 to 90%.

Think about how you’ll spend your time and money — and build a savings plan that supports it.

2. Life Expectancy

The average life expectancy in the U.S. is now 78 years, but, per CDC data, one in four 65-year-olds will live past 90.

Planning for at least 30 years of income helps ensure your savings last as long as you do.

3. Inflation and Rising Costs

Even low inflation can reduce purchasing power. The 2024 inflation rate averaged 3.2%, and the Federal Reserve expects about 2.5% annually through 2026.

Keeping some stock exposure in retirement can help your portfolio grow faster than inflation.

4. Location and Cost of Living

Where you retire matters. Retirees in California need 25% more saved than those in Florida, mainly due to higher housing and taxes.

If you want your savings to stretch further, consider relocating to a lower-cost state like Texas or Tennessee, where there’s no state income tax.

Healthcare and Other Hidden Retirement Costs

Even the best retirement plan can fall short if you overlook hidden costs.

From rising healthcare expenses to long-term care and taxes, these often-overlooked factors can quietly chip away at your savings — unless you plan for them early.

Healthcare Expenses

Healthcare is one of the most underestimated costs in retirement. Fidelity projects that a 65-year-old couple retiring in 2025 will spend about $345,000 on medical costs, excluding long-term care. This represents a nearly 5% increase over the previous year’s study.

Long-Term Care

Roughly 70% of retirees will need long-term care, according to the U.S. Department of Health and Human Services, with costs ranging from $100,000 to $150,000 depending on the duration and type of care.

You can prepare by purchasing long-term care insurance or hybrid life insurance policies that cover chronic illnesses.

Taxes on Retirement Income

Withdrawals from traditional 401(k)s and IRAs are taxed as income, while Roth IRA withdrawals remain tax-free.

The IRS now requires Required Minimum Distributions (RMDs) at age 73, so plan withdrawals carefully to avoid penalties.

How to Calculate Your Personal Retirement Number

Once you understand the benchmarks, it’s time to crunch your own numbers. Here’s a simple, step-by-step way to estimate how much you’ll need to retire comfortably:

Step 1: Estimate Annual Retirement Expenses

List all your expenses, from housing and insurance to food, travel and entertainment. Tracking your spending for three months gives a realistic baseline.

Step 2: Multiply by 25

Multiply your annual expenses by 25 to find your total savings target.

Example: $70,000 ?– 25 = $1.75 million

Step 3: Adjust for Inflation and Healthcare

If you want a buffer for rising costs, multiply by 26x to 28x to include inflation and healthcare expenses.

Step 4: Subtract Guaranteed Income

Estimate your income from Social Security, pensions and annuities.

Example: If your annual spending goal is $70,000 and Social Security will cover $25,000, you’d need your savings to generate the remaining $45,000 — meaning your target nest egg would be about $1.1 million.

Strategies to Reach Your Retirement Goal

Knowing your target number is just the start — reaching it takes consistent action. These smart, research-backed strategies can help you boost savings, reduce taxes and make your money last throughout retirement.

1. Max Out 401(k) and IRA Contributions

In 2025, you can contribute up to $23,500 to a 401(k), plus $7,500 in catch-up contributions if you’re 50 or older — a total of $31,000 tax-deferred savings.

2. Use Catch-Up Contributions After 50

Under the SECURE 2.0 Act, workers ages 60 to 63 can contribute an additional $11,250 to their 401(k) each year — a powerful way to close the gap before retirement.

3. Diversify Investments

Maintain a balanced portfolio with a mix of stocks, bonds and other assets. Retirees with diversified portfolios are more likely to sustain long-term withdrawals without running out of money.

4. Delay Social Security

Waiting to claim Social Security past your full retirement age increases your benefits by 8% per year, up to age 70.

Final Take to GO: Your Retirement Number Is Personal

So, how much do you need to retire comfortably? While rules like the 25x rule and the 4% rule provide strong starting points, the right number depends on your expenses, health and goals.

Building flexibility into your plan — from maximizing catch-up contributions to preparing for healthcare costs — can help ensure your money lasts as long as you do.

For a personalized estimate, try the retirement calculator to see where you stand and how to reach your target.

Information is accurate as of Oct. 24, 2025.

Share This Article: