Retirement Planning: How Much Do You Need to Save?

The 4% rule is the most famous retirement guideline: withdraw 4% of your portfolio in year one, adjust for inflation each year after, and your money has a high probability of lasting 30 years.

From this, your retirement number is simple: multiply your desired annual income by 25.

The 4% rule was built on historical US returns. With 2026's lower expected returns, many planners now suggest a more conservative 3.5% — which means multiplying by ~29 instead of 25 ($1.71M for $60k/year).

Maximizing tax-advantaged accounts is the most powerful lever you have. 2026 limits:

The tax math is significant:

• Traditional contributions cut your current taxable income (saving 22–37% at your marginal rate)
• Roth contributions grow tax-free and withdraw tax-free
• HSA is triple-tax-advantaged — pre-tax in, tax-free growth, tax-free out for medical

For high earners above Roth income limits, the backdoor Roth strategy still works.

Meet a 35-year-old earning $85,000, with $90,000 already saved, contributing $800/month (employer match included), targeting retirement at 65 with 7% average returns and 3% inflation.

At a 4% withdrawal rate, $982,000 generates about $39,000/year — plus Social Security. If they want $60,000/year from the portfolio, they're short by ~$500,000.

The fix: increase contributions (an extra $400/month closes most of the gap) or retire at 67 (two more years of compounding + larger Social Security). Small input changes reshape the 30-year outcome.

Claiming age is one of the most consequential retirement decisions. Full Retirement Age (FRA) is 67 for most people.

The break-even point lands around age 80–82. If you expect to live past that, delaying to 70 maximizes lifetime income. But it's not purely math — if you need income, have health concerns, or want to preserve your portfolio early, claiming sooner can be right.

Spousal and survivor benefits add complexity; run the numbers for your household, not just yourself.

How you withdraw matters as much as how much you saved. A tax-efficient order extends portfolio life:

1. Taxable accounts first — long-term capital gains at preferential rates
2. Tax-deferred next (traditional 401k/IRA) — taxed as ordinary income on withdrawal
3. Roth last — let it keep growing tax-free as long as possible

Other levers:

• Roth conversions in low-income years — move traditional funds to Roth at a lower rate
• Required Minimum Distributions (RMDs) begin at 73 for traditional accounts — plan for the tax hit
• Sequence-of-returns risk — a market crash in your first retirement years is the biggest longevity threat; keep 2–3 years of cash to avoid selling into a downturn

The two questions that matter: how much do I need, and am I on track? Run the numbers with your real inputs — age, savings, contribution rate, return assumption — and adjust one variable at a time.

The Retirement Planner on Adept.club models growth, inflation, Social Security, and withdrawal strategies to project your portfolio through retirement and flag gaps. Free, no sign-up.