Retiring Early

How Much Money Do You Need to Retire Early?

Depending on your age and your lifestyle, you need to save a quite lot of money to be able to retire early. There are three important factors that make a difference in how much money you need to retire early:

1. How many years you'll be retired
2. How much money you need each year
3. The rate of return that you will earn on your retirement savings.

The chart below assumes 6%, which is the historical average rate of return for very non-risky assets. If your time to retirement is very long, you should be able to invest in slightly riskier assets and get a higher rate of return than 6%.

How to Read the Retirement Table.

The table below shows how much money you'll have to save to retire early. Notice that if you only need $20,000 per year to live on, you can retire with a relatively small amount of money. However, if your lifestyle requires more (which it likely does), you'll have to save significantly more money to retire early. Also notice that the earlier you retire, the more money you'll need.

Money Needed to Retire, Given Number of Years to Live and Annual Income Desired

(assumes a 6% return on retirement savings, pre-tax dollars)

Years to Live $20,000 $25,000 $30,000 $35,000 $40,000
50 Years $316,862 $396,078 $475,293 $554,509 $633,724
45 Years $311,083 $388,853 $466,624 $544,395 $622,165
40 Years $303,276 $379,094 $454,913 $530,732 $606,551
35 Years $292,729 $365,911 $439,093 $512,276 $585,458
30 Years $278,482 $348,102 $417,723 $487,343 $556,964
25 Years $259,236 $324,045 $388,854 $453,663 $518,472
20 Years $233,237 $291,546 $349,856 $408,165 $466,474
15 Years $198,116 $247,645 $297,174 $346,703 $396,231
10 Years $150,671 $188,339 $226,007 $263,675 $301,342
5 Years $86,580 $108,225 $129,870 $151,514 $173,159

 

 

Money Needed to Retire, Given Number of Years to Live and Annual Income Desired - Continued

(assumes a 6% return on retirement savings, pre-tax dollars)

Years to Live $45,000 $50,000 $75,000 $100,000
50 Years $712,940 $792,155 $1,188,233 $1,584,310
45 Years $699,936 $777,707 $1,166,560 $1,555,414
40 Years $682,370 $758,189 $1,137,283 $1,516,378
35 Years $658,640 $731,822 $1,097,734 $1,463,645
30 Years $626,584 $696,205 $1,044,307 $1,392,410
25 Years $583,281 $648,090 $972,135 $1,296,180
20 Years $524,783 $583,093 $874,639 $1,166,185
15 Years $445,760 $495,289 $742,934 $990,579
10 Years $339,010 $376,678 $565,017 $753,356
5 Years $194,804 $216,449 $324,674 $432,898

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