How much money do I need to retire?
Answered by Cheryl Heikka
Financial Strategist · Your One Agency
The honest answer is that the popular formulas measure different things. The 80% rule says you'll need about 80% of pre-retirement income to keep your lifestyle. The 4% rule works backward from spending: divide the annual income you want your savings to produce by 4% (so $40,000 a year suggests roughly a $1 million portfolio). Multiplier guidance often lands around 10-12x income by retirement age. All are useful starting points and all miss the same thing: the number matters less than its composition. Two people with the same $1M can have completely different security depending on how much of their essential spending is guaranteed versus market-dependent. Start with your real expenses, subtract guaranteed income, and the gap is what your savings actually has to do.
The gap most people miss
People chase a savings number without knowing what the number needs to do - the gap between essential expenses and guaranteed income is the figure that determines whether any amount is "enough."
The "will my money last" check turns your situation into that one number.