Rule of 25 Calculator
How the Calculator Works
This calculator helps you determine your target retirement savings using the Rule of 25, which is based on the 4% rule. It provides:
- Target retirement savings amount (25x annual expenses)
- Safe withdrawal amount (4% of portfolio)
- Visual representation of your retirement goals
- Multiple currency support
- Detailed breakdown of calculations
- Long-term retirement planning insights
Enter your expected annual expenses below to calculate your target retirement number.
Enter your expected annual expenses in retirement
Key Calculations Explained
The Rule of 25
The Rule of 25 is calculated as:
- Annual expenses × 25 = Target retirement savings
- Based on the 4% safe withdrawal rate
- Designed to last 30+ years in retirement
- Accounts for inflation and market returns
Safe Withdrawal Rate
The 4% rule suggests:
- Withdraw 4% of your portfolio annually
- Adjust withdrawals for inflation each year
- Portfolio should last 30+ years
- Based on historical market performance
Annual Expenses
Consider including:
- Basic living expenses
- Healthcare costs
- Travel and leisure
- Unexpected expenses
Important Considerations
Market Conditions
The 4% rule assumes average market returns. In periods of poor market performance, you may need to adjust your withdrawal rate.
Inflation
Your expenses will likely increase over time due to inflation. Consider this when planning your retirement savings target.
Lifestyle Changes
Your spending patterns may change in retirement. Review and adjust your annual expense estimates regularly.
Disclaimer: This calculator provides estimates only and should not be considered financial advice. The calculations are based on the 4% rule, which is a general guideline and may not be suitable for all retirement scenarios. The calculator assumes a constant rate of return and does not account for market volatility, inflation, changes in spending patterns, or unexpected expenses. The 4% rule may not be appropriate for all market conditions or personal circumstances. Please consult with a qualified retirement planner for personalized advice regarding your retirement strategy.