How much money do I need to retire?

The most common guideline is to have 25x your annual spending saved by retirement (the '4% rule'). If you need $50,000/year in retirement, you'd want roughly $1.25 million saved. This rule assumes a 30-year retirement with a diversified portfolio.

How much does healthcare cost in retirement?

Fidelity estimates a 65-year-old couple retiring in 2024 will need approximately $315,000 for healthcare expenses throughout retirement. Medicare covers a lot, but premiums, supplemental insurance, dental, vision, and prescriptions add up. Long-term care can cost $50,000-$100,000+ per year if needed.

Does Social Security cover retirement expenses?

The average Social Security benefit in 2025 is roughly $1,900/month ($22,800/year). The maximum benefit at full retirement age is about $3,800/month. For most people, Social Security covers 30-40% of pre-retirement income — it's a supplement, not a full retirement plan.

How does inflation affect retirement costs?

At 3% annual inflation, costs double roughly every 24 years. If you retire at 65, your $50,000/year expenses would be equivalent to $100,000/year by age 89. This is why retirees need growth investments, not just bonds — you need your money to keep up with rising prices.

The 4% rule (Trinity Study) suggests you can withdraw 4% of your portfolio in year one of retirement, then adjust for inflation each year, and have a high probability of not running out of money over 30 years. So a $1 million portfolio supports roughly $40,000/year in withdrawals.

🏖️

Cost of Retirement

Retirement isn't free. Healthcare, housing, travel, and inflation mean you need more than you think. Here's what it actually costs — and how much to save.

⚙️ Your Retirement Inputs

Lifestyle

Retirement Age: 65

5075

Life Expectancy: 90

75100

Expected Inflation: 3%

1%6%

Monthly Social Security: $1,900

$0$4,000/mo

Monthly Expenses

$4,700

Annual (After SS)

$33.6K

Total Over 25 Years

$1.23M

inflation-adjusted

Portfolio Needed (4% Rule)

$840.0K

Monthly Expense Breakdown

🏠

Housing

$1,500/mo

Mortgage/rent, property tax, insurance, maintenance, HOA

31.9% of total

🏥

Healthcare

$800/mo

Medicare premiums, supplemental insurance, prescriptions, dental, vision

17.0% of total

🍽️

Food

$600/mo

Groceries and dining out

12.8% of total

🚗

Transportation

$500/mo

Car payment, insurance, gas, maintenance, or public transit

10.6% of total

⚡

Utilities

$300/mo

Electric, gas, water, internet, phone

6.4% of total

✈️

Travel & Leisure

$500/mo

Vacations, hobbies, golf, entertainment

10.6% of total

🛡️

Insurance

$200/mo

Life insurance, long-term care, umbrella policy

4.3% of total

🛒

Personal & Miscellaneous

$300/mo

Clothing, gifts, subscriptions, personal care

6.4% of total

What to Do About It

Max out tax-advantaged accounts. 401(k) ($23,500/year in 2026), IRA ($7,000), HSA ($4,300 individual). These compound tax-free and are your biggest wealth-building tools.

Plan for healthcare costs separately. Fidelity estimates a retired couple needs $315,000+ just for healthcare. An HSA is the best tool — triple tax advantage and no required minimum distributions.

Don't underestimate inflation. At 3% inflation, your expenses double every 24 years. Your retirement portfolio needs growth, not just preservation.

Consider where you retire. The same lifestyle costs 40-50% less in Mississippi than in Massachusetts. Location is the single biggest lever on retirement costs.

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