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A useful starting estimate is to have around 25 times the annual spending your investment portfolio needs to cover in retirement.
That is an important distinction. You do not necessarily need 25 times your entire retirement budget because Social Security, pensions, or other reliable income may cover part of it.
For a quick progress check, Fidelity also uses retirement savings benchmarks of roughly 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67. Those numbers are useful guideposts, but they rely on specific assumptions and should not be treated as pass-or-fail rules.
The closer you get to retirement, the more useful a spending-based calculation becomes.
Key takeaways
- Fidelity’s widely cited benchmark is about 1x salary at 30, 3x at 40, 6x at 50, 8x at 60, and 10x at 67, assuming retirement around age 67 and several other planning assumptions.
- The 25x rule comes from using a 4% initial withdrawal rate: $40,000 of annual portfolio withdrawals requires roughly $1 million.
- Do not automatically multiply your entire retirement budget by 25. First subtract reliable income such as Social Security or a pension that will be available during retirement.
- A 4% withdrawal rate is a planning guideline, not a guarantee. Fidelity currently describes roughly 4% to 5% as a starting range for many traditional retirements, while much longer retirements may justify a lower rate.
- Your target should also account for taxes, health care, retirement age, inflation, and how long your money may need to last.
How much should you have saved by age?
One of the easiest ways to check your progress is to compare your retirement savings with a multiple of your current salary.
Fidelity’s current guideline looks like this:
| Age | Retirement savings benchmark |
|---|---|
| 30 | 1x salary |
| 40 | 3x salary |
| 50 | 6x salary |
| 60 | 8x salary |
| 67 | 10x salary |
So if you earn $70,000, the benchmark would suggest roughly $70,000 saved by 30, $210,000 by 40, $420,000 by 50, $560,000 by 60, and $700,000 by 67.
But there is a major detail behind those numbers.
Fidelity’s benchmark assumes someone begins saving about 15% of income annually at age 25, including employer contributions, invests more than half of their savings in stocks on average over their lifetime, retires at 67, and wants to maintain a similar lifestyle in retirement.
Change the assumptions and the target changes.
Fidelity gives the example that someone retiring at 65 could need around 12x final income, while someone working until 70 could require closer to 8x, assuming otherwise similar circumstances.
That is why the multiples are best used as checkpoints, not as a definition of whether you are financially ready to retire.
What if you are far below the benchmark?
Being below 3x salary at 40 or 6x at 50 does not tell you by itself that retirement is impossible.
It tells you to run a more detailed calculation.
Someone earning $150,000 but living comfortably on $60,000 may need a smaller percentage of final salary in retirement than someone earning $80,000 and spending nearly all of it.
Fidelity itself says the retirement savings target depends heavily on both when you retire and how much you plan to spend.
That leads to the more useful calculation.
How does the 25x retirement rule work?
The 25x rule starts with spending instead of salary.
If your portfolio needs to provide $40,000 during the first year of retirement:
$40,000 × 25 = $1,000,000
The math is simply the inverse of a 4% withdrawal rate.
A $1 million portfolio multiplied by 4% produces $40,000 of first-year withdrawals.
| Annual amount your portfolio needs to provide | Approximate portfolio at 4% |
|---|---|
| $30,000 | $750,000 |
| $40,000 | $1,000,000 |
| $50,000 | $1,250,000 |
| $60,000 | $1,500,000 |
| $80,000 | $2,000,000 |
| $100,000 | $2,500,000 |
401(k) Retirement Calculator
But 25x is a planning shortcut, not a guarantee that the money will last indefinitely.
Fidelity currently estimates that an initial withdrawal rate of roughly 4% to 5%, followed by inflation adjustments, can be a reasonable planning starting point depending on retirement length, asset allocation, market conditions, and other factors.
Our 4% rule guide explains that withdrawal strategy in more detail.
Do not multiply your full retirement spending by 25 automatically
This is where the simple 25x rule often gets used incorrectly.
Suppose you expect to spend $60,000 per year in retirement.
If your investments must cover all $60,000, then:
$60,000 × 25 = $1.5 million
But suppose you expect $24,000 a year from Social Security once you begin claiming it.
Your portfolio gap would then be roughly:
$60,000 − $24,000 = $36,000
At a 4% starting withdrawal rate:
$36,000 × 25 = $900,000
That is very different from $1.5 million.
The more useful formula is:
Annual retirement spending − reliable retirement income = amount your portfolio must provide
Then:
Portfolio income need ÷ withdrawal rate = estimated retirement target
This still needs adjustments for taxes and timing, but it is much closer to how retirement actually works.
A better four-step way to calculate your retirement number
Start with annual retirement spending.
Estimate housing, food, utilities, transportation, travel, insurance, health care, hobbies, gifts, and irregular expenses. If retirement is decades away, using today’s dollars can make the estimate easier to understand.
Next, estimate reliable income.
That can include Social Security, a pension, or other predictable retirement income.
Then calculate the amount your investments need to provide each year.
Finally, choose a reasonable starting withdrawal rate for the type of retirement you are planning.
For example, imagine you expect $70,000 in annual retirement spending and $30,000 from Social Security and a pension.
Your investments need to cover about:
$70,000 − $30,000 = $40,000 per year
At 4%:
$40,000 ÷ 0.04 = $1,000,000
At 3%:
$40,000 ÷ 0.03 = about $1.33 million
Neither number is automatically correct. They represent different assumptions about how aggressively you withdraw from the portfolio.
Is 4% always the right withdrawal rate?
No.
The 4% rule is useful because it turns a complicated retirement question into understandable math. But retirement length matters.
Fidelity currently describes roughly 4% to 5% as a potential starting withdrawal range for many retirement situations, with the exact sustainable amount depending on factors such as longevity, inflation, market returns, retirement age, and investment allocation.
For people planning very long retirements, Fidelity suggests considering a lower rate around 3% as a conservative planning estimate.
A 3% withdrawal rate is equivalent to needing roughly 33 times the annual amount your portfolio must provide.
That does not mean everyone retiring early needs exactly 33x expenses. It simply shows why someone expecting a 50-year retirement should not automatically use the same assumptions as someone retiring at 67.
See our FIRE movement guide if you are planning to leave work much earlier than the traditional retirement age.
How should Social Security fit into the calculation?
Use your own benefit estimate rather than a generic national number.
The Social Security Administration lets you see personalized estimates based on your earnings record and compare different claiming ages through a my Social Security account.
The amount also depends on when you claim. Social Security retirement benefits can generally begin between ages 62 and 70, with a higher monthly retirement benefit when claiming is delayed, up to age 70.
There is also uncertainty around future benefits.
The 2026 Social Security Trustees Report projects that, if Congress makes no changes, the combined Social Security trust fund reserves would be depleted in 2034. Continuing program income at that point is projected to cover about 83% of scheduled benefits.
That does not mean everyone should simply multiply their estimated Social Security benefit by 83%.
A more useful planning approach is to run at least two scenarios: one using your current-law SSA estimate and another using a reduced benefit if you want to stress-test your plan.
Our guide to Social Security for younger workers goes deeper into that uncertainty.
Do not forget taxes
Your retirement spending is what you need after paying the bills, but money coming out of your accounts may have different tax treatment.
Traditional 401(k) and Traditional IRA withdrawals are generally taxable income. Qualified Roth distributions can generally be tax-free. Taxable brokerage accounts follow another set of tax rules.
So if you calculate that you need $50,000 a year to live, you may need your portfolio to produce more than $50,000 in gross withdrawals to cover both spending and taxes.
The exact amount depends on your mix of accounts, other income, filing status, and tax law when you retire.
This is one reason a detailed retirement projection becomes more valuable as retirement gets closer.
Health care can change the target too
Health care should not be buried inside a generic inflation assumption.
Fidelity’s current retirement-spending research notes that health costs can remain a meaningful part of retirement expenses even as spending in some other categories declines.
The issue becomes especially important if you plan to retire before Medicare eligibility because you may need to fund private health coverage during the gap.
Long-term care is another separate risk that a simple 25x calculation may not fully capture.
The goal is not to guess a perfect health care bill decades in advance. It is to avoid building a retirement target that assumes those costs are zero.
What if you are behind on retirement savings?
First, calculate the gap using your own expected spending instead of panicking over a salary benchmark.
Then look at the levers you can actually change.
Increasing your savings rate gives more money time to compound. Reducing future retirement spending lowers the amount your portfolio needs to support. Working longer can give you more years to save while shortening the retirement period and potentially increasing your Social Security benefit. Fidelity identifies higher saving, lower spending, and later retirement as potential ways to improve an underfunded plan.
Also capture a valuable employer match when available and use tax-advantaged retirement space where it fits your finances.
For 2026, the employee contribution limit for most 401(k), 403(b), governmental 457 plans, and the federal TSP is $24,500, while the combined Traditional and Roth IRA contribution limit is $7,500.
See our 2026 retirement contribution limits and super catch-up contribution guide if you are trying to increase savings.
Frequently asked questions
How much should I have saved by 30?
Fidelity’s guideline is roughly 1x your annual salary by age 30. That assumes a specific savings and retirement path, so use it as a progress checkpoint rather than a requirement.
How much should I have saved by 40?
The same Fidelity framework suggests about 3x your salary by age 40. Your actual target may be higher or lower depending on retirement age and expected spending.
How much should I have saved by 50?
Fidelity’s benchmark is approximately 6x salary by age 50, increasing to 8x by 60 and 10x by 67 under its standard assumptions.
Is $1 million enough to retire?
It can be, but the answer depends on what you need the portfolio to provide.
At a 4% initial withdrawal rate, $1 million translates to roughly $40,000 of first-year portfolio withdrawals before considering taxes, followed by whatever inflation-adjustment strategy you use. Social Security, pensions, retirement length, health care, taxes, and spending all change whether that is enough.
Should I use salary multiples or the 25x rule?
Use salary multiples as a quick progress check while you are still decades from retirement.
As retirement gets closer, estimating actual spending, subtracting reliable income, and calculating how much your portfolio must provide is more useful because it reflects how much cash your lifestyle actually requires.
Does the 25x rule include Social Security?
Not automatically.
If Social Security or a pension will cover part of your retirement spending, calculate the remaining amount your portfolio needs to provide and apply the withdrawal-rate calculation to that gap. Also account for years before those benefits begin.
What if I want to retire early?
A longer retirement generally requires more caution because your portfolio may need to support decades of additional withdrawals. Fidelity suggests that people planning unusually long retirements consider a lower starting withdrawal rate, around 3%, as one conservative planning approach.
Bottom line
There is no single retirement savings number that works for everyone.
Fidelity’s 1x salary at 30, 3x at 40, 6x at 50, 8x at 60, and 10x at 67 benchmarks are useful for checking your progress, but they are built on assumptions about savings rate, investing, retirement age, and lifestyle.
For your actual retirement target, start with what you expect to spend. Subtract Social Security, pensions, and other reliable income. Then estimate the portfolio needed to cover the remaining gap using a withdrawal rate appropriate for your retirement timeline.
For many traditional retirement plans, 25x the annual amount your portfolio must provide is a useful first estimate.
It is a starting point, not the finish line.
For the accounts that can help you build toward that target, see our retirement accounts hub.
This article is for general educational purposes and is not individualized financial, investment, tax, or retirement advice. Retirement projections depend on assumptions about spending, inflation, investment returns, longevity, taxes, and future government benefits. Consider using current account data and professional advice when making decisions for your own retirement.
