The number most people guess. A framework to calculate it.
Most people approach retirement without a specific number. Without a target, any savings rate feels simultaneously too much and never enough.
The Situation
Retirement planning without a specific portfolio target is navigation without a destination. The number tells you whether you're on track, how far off you are, and what adjustments would close any gap. Without it, saving for retirement is an act of faith rather than a structured plan.
The retirement number is not a prediction. It is a planning anchor that makes every other retirement decision calculable.
— Worthune Decision Framework
Calculating Your Number · Steps 1 & 2
Start with your current annual spending and adjust: subtract work-related costs (commute, clothing, lunches), subtract mortgage if it will be paid off, add travel and healthcare estimates. Most people find their retirement spending target is 70–90% of current spending.
Estimate annual spendingMultiply your annual retirement spending target by 25. This is the portfolio size that, at a 4% annual withdrawal rate, historically supports a 30-year retirement without depleting the portfolio in most market scenarios. This is your primary planning target.
Multiply by 25Refining Your Number · Steps 3 & 4
Social Security, pension income, rental income, and part-time work income all reduce the amount your portfolio needs to generate. Subtract expected annual income from these sources from your spending target before multiplying by 25.
Reduce by guaranteed incomePlanning for 30 years of retirement: 25× is a reasonable anchor. Planning for 40+ years (early retirement): 30–33× provides additional buffer. Planning for under 20 years: 20× may be sufficient with conservative spending.
Adjust multiplier for timelineClosing the Gap · Steps 5 & 6
Current gap = retirement target − current portfolio value. This is the amount compounding and future contributions need to close. Calculate how long your current trajectory takes to close it — and what adjustments would accelerate the timeline.
Make the gap explicitThree levers close the retirement gap: increasing contributions, reducing target spending, or delaying retirement date. Model each independently to understand which produces the largest impact for the smallest lifestyle change.
Identify the highest leverAfter the Work
After calculating your target and current gap:
Your savings rate and timeline align with your retirement number. Protect contributions and let compounding work.
The gap is now quantified. Identify which lever — contributions, spending, or timeline — closes it most efficiently.
Calculate your number today. Even an approximate target transforms retirement saving from vague to directional.
A specific number makes every subsequent retirement decision measurable.
Next Step
Use Worthune's retirement number calculator to define your spending target, apply the right multiplier, and see exactly what your current trajectory produces.
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