How Much Do You Need to Retire? [Infographic]

by David Ning · 47 comments

Okay. We know you don’t need $12 million to retire, but how much do you need?

Have you ever wondered about this but don’t know how to go about it? Here is some help that the folks at GoBankingRates help put together. The first chart assumes that you will be withdrawing $100,000 every year in today’s dollars, and that inflation will be 2.5% (that’s why the later you retire, the more you actually need because if you wait till next year to start withdrawing, you will need $102,500 to have the same purchasing power).

To keep things simple, there’s an assumption that you will be withdrawing the same amount every year. It’s not the most accurate assumption since this changes as your needs change but if you’ve never calculated how much you need to retire, this is a good number to start off with.

Note that in reality, inflation will likely be higher than the assumption of 2.5% a year, so view these numbers as the bare minimum. The chart also assumes a 6.5% return on your investments, and an average depletion of all your money at age 105, so if you believe your situation is different, then make adjustments from there.

Let me stop typing, because the charts and graphs below are much more interesting. Find out how much you know about retirement planning and see if your plan is ready for prime time.

(If you don’t see the picture, please click here to go to MoneyNing.com. If you want to see a bigger version, click on the image.)

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{ 47 comments… read them below or add one }

Jersey Mom September 24, 2010 at 7:20 am

These are useful charts. Thanks for the info.

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Justin September 24, 2010 at 7:35 am

The caption on the second table is misleading. It says “if you are currently 35″ but the table axis indicates this should be “if you have 35 years to save before retirement”

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MoneyNing September 24, 2010 at 11:11 am

You are absolutely right. This should be fixed if you refresh the page now. Thank you so much for pointing it out.

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marci357 September 24, 2010 at 7:42 am

Nice to see that they finally are including “reasonable” columns on the charts…
Like how much a month do you need at retirement…$1000/month….. :)

Usually these things don’t take into account those of us who don’t require much to enjoy life on. Thanks.

Just upped my 401K withdrawal to 25% of gross… want to make one final splurge effort before retiring :)

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MoneyNing September 24, 2010 at 11:11 am

Ha. Great to hear that you are actually using some of your retirement funds :)

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marci February 10, 2011 at 12:49 pm

not withdrawal from the fund –
withdrawal from my paycheck :)
sorry ’bout the confusion.

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Briana @ GBR September 24, 2010 at 11:56 am

I was doing the research for this infographic and it really surprised me exactly how much I will need at retirement. I’m only 20 but it looks like I need to start saving soon. I plan on starting up my 401k at the first of the year. What happens if how much I need to save per year is more than I make a year? Will I have to make those payments up when I increase my salary?

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Peak Potentials Training September 24, 2010 at 1:25 pm

Just wanted to say that this was a very clear post on the difference between ROTH-Ira and 401K and really helped clarify things. I appreciate it very much. Enjoy your weekend,

Peak Potentials Team

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UH2L September 24, 2010 at 2:01 pm

It’s crazy that my target of $3,300,000 (which I’ve posted before) is almost exactly what they recommend ($3,287,000) for somebody who’s 40 and wants to retire at 55. I’m 39 and I was hoping to retire at 53 or 54. Who knows how the market will pan out in the next 15 years.

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Donna September 30, 2010 at 11:14 am

What it boils down to be is a roll of the dice. I did all the right things and this last recession lost $$$ in the market about 1/3 of investments. I stayed in the market and still have only gotten 50% of lost money back. I was not not overly exposed in stocks (65%), well diversified, and knowlegable. The problem is those who ran wall street were greedy and mislead us all. It will never happen to me again.

Now I listen more to my instincts, I will have my home paid off–not refinanced within 2 yrs. I will plan as if I am running a business–not retirement. That way I will less inclined to listen to “those in the know” who really just “know” they want your money.

I have lived on much less than what I have and can eke a living and still be happy. My wants & needs are few so I plan to survive. I have several plans–plan A,B,C,D,E. I keep working on options. Remaining flexiable, plyable, healthy, and being a bit tenacious is more valuable than than the millions speculated in the charts. ( I retired 10 yrs ago at 50)

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Daniel July 24, 2013 at 12:10 pm

I agree wholeheartedly. My experience has been very similar. Despite saving 15-20% of my gross for 15 years, I don’t come even close to saving what these tables indicate is needed.
I’ve watched my “investments” grow by tiny amounts in brokerage accounts and have decided to take control of my own retirement.
Should have my home paid off in the next 5 years.

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container store October 5, 2010 at 1:36 pm

The chart and the data are really very helpful, going through this chart I realized that I will have to think again on my retirement planning.

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nike air jordan jumpman pro October 19, 2010 at 11:47 pm

I have lived on much less than what I have and can eke a living and still be happy. My wants & needs are few so I plan to survive. I have several plans–plan A,B,C,D,E. I keep working on options. Remaining flexiable, plyable, healthy, and being a bit tenacious is more valuable than than the millions speculated in the charts. ( I retired 10 yrs ago at 50)

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nike air jordan jumpman pro October 19, 2010 at 11:49 pm

The caption on the second table is misleading. It says “if you are currently 35? but the table axis indicates this should be “if you have 35 years to save before retirement”

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Blue Spyder November 29, 2010 at 4:47 am

I’m 28 and plan a retirement at 55. I’m ready to take drastic action to bulk up my IRA. I keep one with my credit union so I’m not gaining big money, but I’m also not losing a dime neither, so the next I open will be an investment account at Schwab or Navy Federal Financial to get exposure to the mutual fund markets.

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Brooklyn Girl January 29, 2011 at 6:54 am

The charts actually make no sense, since they don’t include life expectancy. Why would I need hundreds of thousands of dollars MORE if I’m going to retire at 85 instead of 65? At best, I’d have only ten more years left. They also don’t take into account that your money will still be working for you after you retire; hopefully, you’re still going to keep it invested, and the rate of return should offset inflation.

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Barry Payne April 8, 2013 at 9:09 pm

Brooklyn Girl, just some advice. If you have something happen to you (car wreck, etc.), the economy tanks (worse), you have family that ask for your help, there are many, many things to take into account or the unexpected. I have to retire from physical problems at 55, and unless I am a Wal Mart greeter, I won’t be able to work. Aim for retiring as young as you can. If you’re young now you’ll have plenty of time to put away 10-20 percent in a retirement fund and don’t touch it. That way, if something happens, you’ll be prepared, and can work longer if you’re healthy, or retire if you’re not. Have fun during the journey to retirement, the memories are priceless.

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Jim February 10, 2011 at 12:37 pm

8% return every year? What fantasy world is that in?

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Pamela April 16, 2011 at 5:05 pm

Unfortunately, it looks like all the numbers in the tables are overstated—in some cases drastically so. Look at the second table—the one labeled “How Much You Need to Save Each Year.” According to the table, if you have 35 years to save and you wish to withdraw $5,000 per month, you’ll need to save $40,000 annually. Using the assumption of earning 6.5% annually, saving $40,000 a year will give you a balance of $4,961,388 in 35 years. Assuming you will still earn 6.5% on that money, that will bring in nearly $27,000 in interest the first month alone. After withdrawing your first $5,000 monthly retirement payment, you’ll still end up with more at the end of the month in your balance than you had when you started. You would never run out of money if you only withdrew $5,000 monthly. In fact, at the time of your death you would have millions of dollars left.

The values in the first table are overstated as well. If someone is currently 45 years old, wants to retire when they are 60 (15 years from now) and withdraw the equivalent of $100,000 in today’s dollars with inflation of 2.5% annually, they would want to withdraw $144,830 annually. Keeping that withdrawal amount fixed and assuming death at age 105 (as stipulated in the assumptions) that person would need 45 years of retirement funds of $144,830 each year. That equates to $2,097,169 needed at retirement, not the $3,167,000 as stated in the table.

I’m an advocate for saving for retirement and starting this process when you are fairly young so that it is not as onerous as it could be. However, using the incorrect values in the table makes it seem more of a chore than it actually will be. And it will be difficult enough for many. I don’t think the author of the article generated the tables, so it’s not the author’s fault. And, there may be assumptions contained in the generation of the numbers that were not stated—perhaps that is why my numbers are different.

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Bernhard December 7, 2013 at 2:09 pm

Its your math that is flawed. You forgot to inflate your withdrawals by 2.5% a year. You will impossibly be able to live of $5000/month in year 2050.

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jim April 17, 2011 at 6:49 am

I have to say this is the nuttiest table I have ever seen. First, how many of use will be able to retire at 100k a year? If you are planning that then you probably don’t need generic information like this.
If you look here in this paper – go to money and scroll down to calculators, you will find a very good retirement calculator where you can plug in variables and get an annual chart showing what you need and have left, including-or not- social security. Retiring at 5k a month is a more realist goal for 95% of the population. This reminds of the ad that says “retire and buy a vineyard in France–Get real” . MSN Money has another good calculator. If you have 500k saved up, with social security and a modest 2% spread of income over inflation, you will have about 5k a month and still a sizable amount left over for the kids.

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marci357 April 17, 2011 at 7:57 am

Retiring at $1000-$2000 month is more realistic…. If we live well on under $18,000 a year now, why would we need more in retirement?

Of course, being debt free, including the house, makes that possible. I think the whole secret is retiring debt free – then the rest is easy. lol.

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ll October 20, 2013 at 8:36 pm

$5k/mo (in today’s $$) is about what my wife and I figured we will need. That is totally debt free, but buying our own health insurance (retiring early). But to be safe, I did not feel comfortable retiring until we know we have over $100K/year coming in without touching any principle. So 2 more years and I am out (hopefully). I concentrated more on producing several income streams, rather than “a number”.

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Patrick April 24, 2011 at 4:52 pm

This is very useful information, especially for younger people who are worried about the future of social security and retirement planning. As an estate planner, I help people make sure what they have is protected and passes the way they want it to, and I am often asked by my clients if they are saving enough.

Now, I can show them these charts, and they can see if they are on track.

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Chris May 6, 2011 at 8:23 am

You are an estate planner and want to show your clients these charts?
Luckily you are not my adviser. Sorry, but you need to be more critical about data.

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Chris May 6, 2011 at 8:05 am

You absolutely do not need that much money for retiring.
The numbers are way overstated. Pay off all debt, never take on
debt ever again (that’s how the banks make money) and live simple.
Look at your biggest 2 or 3 expense items and just cancel them.
Will work for 90% of people, you won’t need them.
I wonder why those numbers are overstated. Causing fear, inciting action?
Hidden advertising? Conflict of interest?
I knew when I started working working that I wanted to retire early.
I never lost sight of my goal, worked hard (overseas, in semiconductors), never took on any debt, and retired 2 years ago aged 42 in Asia. Now I can spend time with family and studying how and central banks reflate the markets.

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Chris May 6, 2011 at 8:20 am

Take good care of your money and do not entrust it to the care of others,
such as government supported retirement schemes, pension funds etc. The government does not care more about your retirement than you do yourself, if at all. Central banks will always support the banks (not you) by printing money (aka quantitative easing), thus taking away your purchasing power. You work hard for it, they just print it (expanding the balance sheet with the click of the mouse). So choose your asset classes carefully.

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Mike January 8, 2012 at 3:41 am

That is a relatively useless article. To whom does it apply? The top 1 percent? The top 0.01 percent? Is there a real world article out there that does not self-serve the auther? The banks and investment houses WANT you to save as much as possible. But the numbers in these charts are not realistic to most people.
While it would be nice to have 100k per year in retirement, how much does that cost you getting to that point? Do I need to work 60 hours, 6 days a week?
Still looking for a real world article……

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a robert chase January 30, 2012 at 9:47 am

ARE YOU KIDING ME
90% OF WORKING PEOPLE WONTEVEN COME CLOSE

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greg January 30, 2012 at 7:11 pm

whatever you do for retirement, don’t save for retirement in US dollars as the actual inflation number is 5-7% underreported (to get an idea -> shadowstats dot com). you cannot afford losing 7-9% of your wealth annually to inflation caused by currency debasement. current central bank policies do make it essential to take time off and work on inflation hedges once you have reached a certain level of wealth, e.g. 500k USD, because you can’t make up for inflation by just keeping your regular work, paying taxes and save. the system setup by banks and government is working against all those salaried people.

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Free Cell Phone Directory Lookup February 16, 2012 at 9:05 pm

I agree that these goals would be very hard to reach for 99% of the people. With the current state of the economy most people are living paycheck to paycheck. Also, who needs to save over $3 million for retirement?? And live to be 105??

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ralph March 22, 2013 at 6:16 am

The best way to retire …. become state employee – u dont really work and u r taken care of for the rest of your life – average teacher in NY has a 2 million dollar retirement plan plus free health care for their lives after working 180 days per year and cutting A’s and B’s out of construction paper

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Shane July 25, 2013 at 6:58 pm

Sorry Ralph but my mom was a public school teacher who averaged a 60 hour work week even having that 50 days in summer that were off days. Most teachers spend as much time preparing for there classes as they do actually teaching children. After you figure in the actual hours of time my mom put in and divide it by the measly average yearly salary she was paid it came out to be less than minimum wage. As far as what she has to live on now after retiring; well lets just say that if you added everything she made as a teacher and every dollar she will draw after retiring it will not come close to being 2 million dollars.

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gary June 20, 2013 at 12:15 pm

Your charts are unrealistic because 98% of the population does not and will never have the kind of money represented in your charts. You need to get into the real world!

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Jose Perez August 27, 2013 at 10:47 am

This is the worst article and calculations I have ever seen in my life. These numbers are ridicoulos . These idiots want to scare the public, you save more and then they take in more fees. When one retires, you stop saving, you do not pay payroll taese any longer, you have social security along with pension and 401 k. One can live on 50 to 70 % of what you earned with no trouble at all.

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jim mclaughlin September 3, 2013 at 6:50 pm

You will need less money the older your retirement age, not more as stated in your tables. You have it backwards!

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Brenda Ponce February 27, 2014 at 11:26 pm

Exactly Jim!!!! I was wondering if anyone would say what you said. Backwards for sure!! They tell you that you need MORE if you retire at 85 than if you retire at 50. I am 52, so going with age 50 for retirement……this chart tells me I only need 2.33 million to retire today, BUT if I wait until I am 85 I need 3.38 million? HA! Please………….no one should believe these charts. I have 620,000 net worth now, and am considering retiring very soon in a tropical country, and I would live very well. Costa Rica is calling my name. Great medical too!!

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Colt September 11, 2013 at 1:00 pm

I need to save $40,000 a year. Good luck. I make $40,000 a year. Should I go homeless until retirement? This article is useless.

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fredjohnson September 16, 2013 at 1:24 pm

First of all, their assumption is that you will live to age 105. Less than a few dozen people out of millions and millions live over age 100. That alone makes this whole table somewhat meaningless. Then, no explanation if this is for a couple or for one person. If a couple, then they need $4.2 million if they are now age 65 and retiring this year. Does any of this take into account social security income? That would cover over one fourth of the $100k all by itself. And, of course, few people need $100k each a year in retirement. The ones that do probably already have their $4.2 mill saved up. Not even 1% of retirees will have $2 million saved by age 65. The charts aren’t really helpful. Personally, I have over $2 mil already saved and I’m 7 yrs from retirement, but I’m the exception, not the rule.

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Colt September 16, 2013 at 6:34 pm

This is fantasy. I wish I could make enough to save this kind of money.

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tony vian November 5, 2013 at 7:27 pm

Are you kidding PETER PAN could not save enough money according to your assessments-be REALISTIC

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Tim November 5, 2013 at 8:10 pm

This is obviously for executives with huge stock options and not ordinary wage slaves. There is no way most people will save anywhere near this. In fact, a recent survey showed the average 55 year old 401k balance was under 100k.

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tony vian November 6, 2013 at 8:23 am

The site should say what you say now. An average investor will be turned off by these goals and think-I can’t reach these numbers what is the use of trying?

You are doing a disservice and should create a chart for the 95% of the people.

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Brenda Ponce February 27, 2014 at 11:30 pm

Beg to differ. I saved for the last 12 years only and have 365,000 in my 401K. I dont make 6 figures……….not even close. No stock options. As a matter of fact, many people in my company have well over 200,000 in that same approximate period of time.

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efells November 9, 2013 at 2:08 pm

I see this was posted sometime ago. I am wondering why marketwatch.com would post a link to this on their current content. I have been retired for five years. I am doing very well, thank you. I have no where near the savings listed on these charts, yet I consider myself set for life. I started saving early. I also began reading a lot on retirement planning. Most of it, like this posting, isn’t worth the media it is written on. Let, me echo some of the comments that have been posted here already. You need to live within your means. You need to live debt free. When you set savings goals, concentrate on expenses in retirement, not your income and savings while working. Save early and often. Keep in mind that in today’s working environment, working to 65 or 70 is unrealistic. Good luck and be mindful of the source of any advice.

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TONY November 9, 2013 at 9:10 pm

You say working to 65/70 unrealistic
Get real how many people reach 70 in good enough health to work?

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tony vian December 7, 2013 at 3:14 pm

Impossible goals for 97% of people
pay off debt before retiring
downsize home
keep car till it dies walk away taka plates off cross out vin numbers
live modestly
get free entitlement
PERIOD

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