Rule of Thumb: When 4% covers 80% of your pre-retirement income.
There’s a whole industry of professionals dedicated to answering this question considering your specific circumstances… but here are some gross rules of thumb.
The 4% Rule - your annual income needs divided by 0.04
Annual Income needs vary highly, but average out to be about 80% of what they were pre-retirement.
Target Retirement Savings by Age
| Age | Annual Salary |
|---|---|
| 30 | 1x annual salary |
| 40 | 3x annual salary |
| 50 | 6x annual salary |
| 60 | 8x annual salary |
| 67 | 10x annual salary |
Note: your Tax-Advantaged Accounts have constraints about when you can take distributions without incurring penalties.