Retirement Calculator: How Much Do You Need to Retire?

The most important number in your financial life is your "retirement number" — the amount you need invested so you can live off the returns without working. Most people have no idea what theirs is. Let's fix that.

The 25× Rule: Your Retirement Number

The simplest retirement formula: multiply your annual spending by 25. That's how much you need invested to retire safely (based on the 4% withdrawal rule — you can withdraw 4% per year without running out of money over 30+ years).

If you spend €3,000/month (€36,000/year), you need €900,000 invested. To get there in 30 years at 8%, you need to invest €604/month starting today.

Your retirement number = annual spending × 25. Everything else is working backward from this target.

How to Calculate Your Number

Step 1: Estimate your retirement spending. Most people spend 70-80% of their working income in retirement (no commute, no work clothes, no retirement savings). If you earn €4,000/month now, estimate €2,800-3,200/month in retirement.

Step 2: Subtract your state pension. European state pensions typically cover €1,000-2,000/month. If your pension covers €1,500/month and you need €3,000/month, your gap is €1,500/month = €18,000/year.

Step 3: Apply the 25× rule to the gap. €18,000 × 25 = €450,000. That's your real retirement number — not €900K, because the pension covers half.

Step 4: Work backward to find your monthly investment. €450,000 in 30 years at 8% requires ~€302/month.

The Impact of Starting Age

At 25, you need €172/month. At 45, you need €1,019/month — 6× more for the same goal. Every decade you wait roughly triples the required monthly investment.

What About Inflation?

A critical point: €3,000/month today won't be €3,000/month in 30 years. At 2% inflation, you'll need ~€5,430/month to maintain the same lifestyle. This means your retirement number is actually higher than the simple 25× calculation.

The fix: use real returns (return minus inflation). At 8% nominal and 2% inflation, your real return is ~6%. This automatically adjusts your projections for purchasing power.

The 4% Rule: Is It Still Valid?

The 4% rule comes from the Trinity Study, which found that withdrawing 4% annually from a diversified portfolio survived 30 years of retirement in 95% of historical scenarios.

For European investors:

• 3.5% withdrawal rate is more conservative and almost guaranteed to last
• 4% works well if you can be flexible (reduce spending slightly in bad years)
• 4.5% works if you have a state pension as a baseline

Common Retirement Planning Mistakes

1. Not accounting for inflation. Planning in nominal terms means you'll come up short.

2. Ignoring your state pension. It reduces your gap significantly — but don't rely on it 100%.

3. Being too conservative. All-bonds or all-cash retirement portfolios don't keep up with inflation. You need equity exposure even in retirement.

4. Starting too late. The difference between starting at 30 and 40 is a 2.4× increase in the required monthly investment.

See It for Yourself

Plug your numbers into our simulator: your target retirement amount, expected return, and time until retirement. See exactly how much you need to invest monthly and watch the projection year by year. Adjust until you find a plan that works for your budget.