Retiring Next Year? Discover the Right Monthly Income Target

_Typically, you won’t have as many expenses in retirement as you did before. _

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Jessica Gibson

Mon, February 23, 2026 at 5:30 AM GMT+9 3 min read

Key Takeaways

Financial experts say you'll need about 70% to 80% of your pre-retirement income to maintain your lifestyle in retirement.

For the median U.S. household income ($83,730), you'd need about $5,233 per month in retirement.

Using the 4% rule, that means that you'd need to save $1.57 million in total.

When preparing for retirement, you’re probably wondering, will I have enough? To answer this, you’ll need to know a few key numbers. First, how much money will you need per month in retirement? And then, how much money will you need to save in total? Read on to learn how to crunch these numbers and get the answers you’re looking for.

How Much Do You Need per Month in Retirement?

First, we need to calculate how much money you’ll need per month in retirement.

If you want to continue the lifestyle you’re living now, just multiply your current income by 75%.

That’s because your costs in retirement will likely be about 70% to 80% of the costs you have now.

So if you currently make the median income in the U.S. per year ($83,730), plan on spending around $62,800 per year, or around $5,230 per month, in retirement.

How Much Do You Need to Save for Retirement?

Now that we know how much you’ll need per year and per month in retirement, we can calculate how much you’ll need to save in total.

There’s a rule of thumb called the 4% rule. It says that for a 30-year retirement, you can safely withdraw 4% of your retirement savings per year, adjusted for inflation each year.

Let’s use the numbers we used above. Someone with the median income in the U.S. ($83,730) can plan on spending around $62,800 per year in retirement. Using the 4% rule, we divide $62,800 by 4%, resulting in about $1.57 million. That’s how much you’ll need to save in total.

Tip

Recent studies suggest that with current rates of inflation, retirees should actually limit their withdrawals to 3.7%.

If we use 3.7% instead of 4%, we divide $62,800 by 3.7%, resulting in about $1.7 million. That’s a more conservative estimate of how much you’ll need to save in total.

Factors that Influence Your Spending in Retirement

Your income needs may fluctuate as you move through retirement. You might spend more in early retirement because you’ll be relatively active and enjoying your new lifestyle. At some point, though, you might settle down. During this middle stage of retirement, your spending might decrease. In late retirement, your spending might increase as you face various medical bills and the cost of care.

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Your spending will also depend on your location and lifestyle. For instance, if you dream of traveling in retirement, you’ll likely spend more than others who prefer to stay close to home. Retirees who live in certain areas will likely pay more for housing and care, which means they’ll need more income in retirement than someone who lives in a more affordable area.

The Bottom Line

Planning for retirement takes a little math. First, assume that you’ll spend about three-quarters (75%) of your current monthly income in retirement. Then use the 4% rule to discover how much you’ll need to save for retirement in total. Tweak the formula to suit your needs and consider your retirement goals, as well as the cost of living in your area. The more prepared you are, the more you can sit back and enjoy your retirement.

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