How much do you need to retire on $100,000 a year?
Savings needed to retire on $100,000 a year
The withdrawal rate is the share of your savings you take out in the first year of retirement, then adjust for inflation. A lower rate is safer and needs a bigger pot.
Spending $100,000 a year
| Withdrawal rate | Savings needed |
|---|---|
| 3% | $3,333,333 |
| 3.5% | $2,857,143 |
| 4% | $2,500,000 |
| 5% | $2,000,000 |
Before taxes. Does not include Social Security or a pension.
How much to save each month
To build $2,500,000 from zero, the monthly saving depends on how long you have and the return you earn.
Reaching $2,500,000
| Years to save | Monthly at 6% | Monthly at 4% | Monthly at 8% |
|---|---|---|---|
| 15 years | $8,713 | $10,218 | $7,405 |
| 20 years | $5,513 | $6,871 | $4,394 |
| 25 years | $3,697 | $4,913 | $2,750 |
| 30 years | $2,565 | $3,648 | $1,775 |
| 35 years | $1,820 | $2,778 | $1,167 |
Saved at month end. Returns are not guaranteed.
Inflation: what you will really need to spend
Prices rise, so $100,000 a year in today's money costs more later. With 2.5% inflation the same lifestyle costs $163,862 a year in 20 years, so the savings target based on the 4% rule grows with it.
$100,000 a year in today's money
| When | Spending needed | Target at 4% |
|---|---|---|
| In 0 years | $100,000 | $2,500,000 |
| In 10 years | $128,008 | $3,200,211 |
| In 20 years | $163,862 | $4,096,541 |
| In 30 years | $209,757 | $5,243,919 |
Illustration at 2.5% a year inflation.
Social Security and other income
Social Security, a pension or part-time work can lower the amount you need to draw from savings. If those cover $30,000 of your $100,000 budget, you would only need to fund $70,000 yourself, a target of about $1,750,000 at 4%. You can see your own Social Security estimate at ssa.gov.
What the 4% rule leaves out
- Taxes: withdrawals from traditional 401(k) and IRA accounts are taxed as income.
- Healthcare costs before and after Medicare begins at age 65.
- Inflation, which raises spending needs every year.
- Market falls early in retirement, which can shorten how long savings last.
Sources and further reading
Questions people ask
How much do I need to retire on $100,000 a year?
What is the 4% rule?
Should I count Social Security?
Results are estimates for information only, not financial advice. Read the full disclaimer.