Someone aged 35 planning to retire at 60 has 25 years, or 300 months, or about 6,500 remaining working days after weekends and leave. That last figure is the one that tends to focus attention, because it is a number you can actually picture.
But a countdown without a funding figure is just a calendar. The useful question is what those 300 months need to carry.
The most widely used starting estimate says your portfolio should be about 25 times your annual spending. It comes from the 4% withdrawal rule — if you draw 4% of the starting balance each year, adjusted for inflation, a stock-and-bond portfolio historically survived 30 years in the large majority of tested periods.
So a household spending 40,000 a year needs roughly 1,000,000. Note that it is 25 times spending, not income — which is why reducing planned expenses is mathematically identical to saving more, and usually easier. Cutting 5,000 a year from your target lifestyle removes 125,000 from the number you have to accumulate.
The future value of regular contributions, assuming a 7% real return after inflation:
Monthly = target × r ÷ ((1 + r)ⁿ − 1), with r and n in years then divided by 12
| Start age | Years to 60 | Needed per year | Needed per month |
|---|---|---|---|
| 25 | 35 | 7,234 | 603 |
| 35 | 25 | 15,814 | 1,318 |
| 45 | 15 | 39,795 | 3,316 |
| 50 | 10 | 72,378 | 6,032 |
Look at the jump between 35 and 45. Ten years of delay does not raise the cost by 40% — it raises the monthly contribution from 1,318 to 3,316, two and a half times as much, for the identical goal. The reason is that the earliest contributions are the ones with the most years to compound, so they do the heaviest lifting. A payment made at 25 has 35 years of growth behind it; one made at 55 has five.
This is the single most valuable fact in retirement planning, and it is also the least actionable if you are already 45 — in which case the honest levers are a higher saving rate, a later retirement date, or a lower target, and usually some of each.
The rule came from studies of historical US market returns over rolling 30-year periods. Its limitations are well documented and worth knowing before you build a life on it:
This calculation deliberately leaves out several things that will change your actual number: state or employer pensions, which may cover a substantial share of your spending and reduce the portfolio you need; employer matching, which is an immediate return no market can beat; the value of your home, which is not spendable unless you downsize; healthcare costs, which are the largest single uncertainty in many countries; and the possibility of part-time work, which reduces the required multiple sharply in the early years.
A 7% real return is an assumption, not a fact. Long-run global equity returns have been broadly in that region, but with drawdowns of 40% or more along the way and multi-decade periods of lower returns. Nothing here is financial advice, and for a plan involving your actual retirement, a regulated adviser who can see your pensions, tax position and family situation is worth the fee.
Yes, by subtracting it from the spending your portfolio has to cover. If you spend 40,000 and a pension pays 15,000, your portfolio only needs to fund 25,000 — so the target drops from 1,000,000 to 625,000.
Clear the debt first, with one exception: contribute at least enough to capture any employer match, because that is typically an instant 50 to 100% return that no debt rate exceeds.
It assumes you stop drawing a salary. Many people find that earning even a modest amount in the first few retired years dramatically reduces sequence risk, because it avoids selling assets during an early downturn.
No. Everything you enter is used only in your browser and nothing is transmitted or saved.
Every tool comes with a written guide, and every category is one click away.