How much do you need to retire?

A rule of thumb from US research in the 1990s. William Bengen’s 1994 paper tested the history of US stock and bond returns and found that a first-year withdrawal of about 4% of the starting balance, raised with inflation each year, had lasted at least 30 years from every starting year he tested. The 1998 “Trinity study” found much the same for portfolios with at least half in stocks. It is a starting point, not a guarantee. A longer retirement or different markets may call for a lower rate.

Everything is in today’s money, so the figures show today’s buying power. The yearly return is taken after inflation: real return = (1 + return) ÷ (1 + inflation) − 1. Its monthly rate is (1 + real return)^(1/12) − 1. Each month the balance grows at that rate and your monthly amount is added. The target is yearly spending ÷ withdrawal rate, so 30,000 at 4% needs 750,000. The age you reach the target assumes you keep adding the same amount every month until then.

Taxes, fees, pensions and state benefits, and any change in your pay. Real returns swing from year to year, so the path you actually take will differ from this smooth one.

No. Everything is worked out in your browser, and nothing you type is stored or sent. It is an estimate, not financial advice, so check the numbers with a qualified adviser before big decisions.