How Much You Need to Retire: The 4% Rule Explained
The practical rule used by investors worldwide to figure out how much capital you need to never work again.
The 1998 Trinity Study analyzed what percentage of your portfolio you can withdraw annually in retirement without running out. The answer surprised many: about 4% per year, adjusted for inflation, for 30 years, in a 60/40 stocks/bonds portfolio.
The simple formula
Required capital = Desired annual spending × 25
Want $30,000/year in retirement? You need $750,000 invested.
Want $50,000/year? You need $1,250,000.
How to get there
If you're 35, have no savings, and want to retire at 65 with $30,000/year, you'll need to save about $760/month at a 6% real return. If you're 25, only $380.
Every decade you wait roughly doubles the required effort.
Uncomfortable truths
Actionable steps today
1. Estimate annual spending in retirement (rule of thumb: 70-80% of current spending).
2. Multiply by 25 to get the target capital.
3. Use our retirement calculator to compute monthly savings required.
4. Automate investing — what you don't see, you don't spend.