There is no single number that fits everyone. Start with what you spend, split into the bills you must pay and the spending you could cut back. Subtract your guaranteed income, such as Social Security and any pension. What is left is the gap your savings must fill, for as long as you live, after taxes and after inflation.
Rules of thumb such as “10 times your salary” or “withdraw 4% a year” are a starting point. They do not know your taxes, your Social Security timing, or whether you are married.
How do I work out how much I need?
- Split your spending in two. Essential: housing, food, utilities, basic healthcare. Discretionary: travel, gifts, everything that could wait a year.
- List your guaranteed income. Social Security, pensions, and any annuity income.
- Find the gap. Compare guaranteed income with essential spending first. That gap is the part of the plan that cannot depend on the market.
- Add taxes. A dollar from an IRA is taxed. A dollar from a Roth is not. The same spending can need very different withdrawals.
- Add inflation and time. The plan has to last into your 90s, at prices that will be higher than today’s.
A retirement income plan that treats all spending as interchangeable is just a withdrawal rate.
Is the 4% rule a good guide?
It is a reasonable first check, not a plan. Withdrawing 4% a year leaves the whole portfolio exposed to a bad market early in retirement, a long life and rising prices. It also ignores taxes: $40,000 from an IRA is not $40,000 to spend. See what sequence of returns risk is and whether annuities are a good investment.
How much does inflation change the number?
More than the yearly rate suggests. Inflation is reported one year at a time, but its effect on prices builds up and does not reverse. From December 2020 to December 2025, consumer prices rose 24.4%, about 4.5% a year. The yearly rate fell below 3% in 2024 and 2025, but prices did not come back down. Future inflation now compounds on top of that higher base.
Source: Bureau of Labor Statistics, CPI-U, December 2020 (262.045) to December 2025 (326.031).
For most people, Social Security is the strongest inflation protection they already have: lifetime income, adjusted each year for prices. A larger starting benefit gets larger dollar increases every year, which is one reason when you take Social Security matters so much.
Can I spend more in retirement if my taxes are planned?
Often, yes. How much you need depends on how much of each withdrawal goes to taxes, and that depends on which account it comes from and when.
An illustration from Financial Fortress: Grant and Susan. Grant and Susan retire at 62 with $3.5 million in a traditional IRA and $1 million in a brokerage account. Deciding each piece separately, they can spend $150,000 a year.
With Social Security timing, Roth conversions and withdrawals coordinated as one plan, they can spend $193,000 a year, 28.6% more, and still leave their heirs about the same. Same savings. The extra spending comes from where the money sits and when it moves.
Illustrative composite and hypothetical figures from the book, not clients. Assumes 7% growth on the IRA and Roth, 6% on the brokerage account, and 2026 federal tax rules. Actual results will differ.
How much do I need to retire if I’m single?
A single retiree has no spouse’s check to fall back on, so the benefit you claim is the benefit you live on. Delaying it builds a larger floor under your essential spending for life.
Big Red is single and retires at 62. Claiming Social Security at 62 would pay $30,000 a year. Waiting until 70 pays $53,143, adjusted for inflation every year after. Using the years in between for Roth conversions, and insuring long-term care early, her plan showed she could spend about $20,000 a year more in her first eleven years of retirement and still leave her brother roughly what he would have received otherwise.
Illustrative composite and hypothetical figures from the book, not a client. Actual results will differ.
Do I need to plan for long-term care?
Yes, because it is one of the largest costs a retiree can face and it arrives late, when options are fewest. The question is whether care will be paid for from savings at the worst moment, or with money or insurance set aside for it in advance.
What do the rules of thumb say, and where do they fall short?
- Replace 70% to 80% of your income. A quick check, but your spending, not your salary, is what has to be paid for. Some people spend more in the first active years of retirement, not less.
- Save 25 times your yearly spending. This is the 4% rule turned around. It assumes your withdrawals are taxed lightly, which is rarely true for money in a traditional IRA.
Each of these rules answers the question for an average person. None of them knows which account your money is in, when you claim Social Security, or what happens to the plan if one of you dies.
How do I pay for health insurance if I retire before 65?
Medicare starts at 65, whenever you claim Social Security. Retire earlier and you need coverage for the gap: a retiree plan from your employer, COBRA for up to 18 months, or a policy from the state marketplace (Access Health CT in Connecticut). Marketplace subsidies depend on income, so the same Roth conversion or IRA withdrawal that helps your taxes later can raise your premiums now. The years before 65 need their own line in the plan.
When can I take money out of my retirement accounts?
Withdrawals from IRAs and 401(k)s are free of the 10% penalty from 59½, and from 55 for a 401(k) at the employer you leave in or after that year. Required minimum distributions begin at 73, or 75 if you were born in 1960 or later. Between those dates you choose how much to take, and that choice is where most of the tax planning happens.
Frequently asked questions
How much do I need to retire at 62?
Enough to cover spending until Social Security and Medicare start, plus the gap after they do. Retiring at 62 usually means paying for health insurance for three years and drawing more from savings while a delayed Social Security check grows.
Is $1 million enough to retire?
It depends on what you spend, what Social Security and any pension cover, and how much of the $1 million is in a traditional IRA, where every withdrawal is taxed. The same balance can be plenty for one household and short for another.
How much does a married couple need to retire?
Start with the couple’s spending, then test the plan for the survivor. When one spouse dies, one Social Security check stops and the tax brackets narrow, so the plan has to work for one person too.
Questions to ask your advisor
- Which of my essential expenses are covered by guaranteed, inflation-adjusted income, and which are not?
- If inflation adds $10,000 to $20,000 to my yearly spending, which account pays for it, and what does that cost in tax?
- Has my plan been tested against one of us dying early, high inflation, or a market drop in the first five years?
- How much more could I spend if my withdrawals and Social Security were coordinated as one plan?
More retirement questions: When can I retire, and will I have enough?
Related questions
Want to know your own number?
Schedule a conversation or read Chapter 1 of Financial Fortress.
This page is general education, not advice for your situation. Tax, Social Security and Medicare rules change; figures reflect 2026 rules. Triathlon Partners LLC is a registered investment adviser in Connecticut and New York. Registration does not imply a certain level of skill or training.