How much money do you need to retire? A comprehensive guide

Retirement is a significant milestone that requires careful planning and consideration. One of the most common questions is, “how much money do you need to retire?” The answer varies based on factors such as lifestyle, location, and individual financial goals.

This guide will help you understand how to determine how much you need to save for retirement, how to calculate retirement savings, and the strategies you can employ to reach your retirement savings goals.

Factors affecting how much you should save for retirement

Several factors can influence the amount of money you’ll need to retire comfortably. These include:

  • Lifestyle: Your desired lifestyle plays a crucial role in determining your retirement savings. Consider your day-to-day expenses, travel plans, and hobbies.
  • Location: The cost of living in your chosen retirement location can significantly impact your savings. Urban areas tend to be more expensive than rural ones.
  • Retirement age: The age at which you plan to retire will affect how much you need to save. Early retirement requires more savings to cover a longer period without income.
  • Healthcare costs: As you age, healthcare expenses typically increase. Ensure you account for medical insurance and out-of-pocket expenses.
  • Inflation: Over time, inflation can erode your purchasing power. Factor in an inflation rate to ensure your savings maintain their value.
  • Regular cash flows: Consider regular income sources such as pension schemes, social security, and annuities. These can significantly reduce the amount you need to save by providing a steady stream of income during retirement.

How to calculate retirement savings

Determining how much money you need to retire involves several steps:

1. Estimate annual expenses: Start by estimating your annual expenses during retirement. This includes housing, food, healthcare, travel, and leisure activities.
2. Determine retirement duration: Estimate the number of years you expect to spend in retirement. This is typically based on your retirement age and life expectancy. In Europe, the average life expectancy is around 82 years, but this can vary by country.
3. Calculate total savings needed: Multiply your estimated annual expenses by the number of years in retirement. For example, if you expect to spend €40 000 annually for 25 years, you would need €1 million.
4. Adjust for inflation: Consider the impact of inflation on your savings. Use an average inflation rate of around 2% to adjust your calculations accordingly.

Retirement savings by age

To ensure you’re on track, it’s helpful to follow general guidelines for retirement savings by age. These benchmarks can vary based on your individual circumstances and retirement goals but provide a useful framework.1 


Savings Goal

Additional Information


1x annual salary

Focus on building an emergency fund and starting your retirement savings early. Consider additional individual retirement accounts for extra savings.


3x annual salary

Increase your retirement contributions by prioritizing savings in your budget. Focus on paying off high-interest debts to free up more savings for retirement.


6x annual salary

Evaluate your retirement plan and make necessary adjustments. Maximize contributions to tax-advantaged accounts and focus on higher-growth investments. Consider consulting a financial advisor for a mid-career financial check-up.


8x annual salary

Shift towards more conservative investments to protect your savings from market volatility. Plan for retirement withdrawal strategies to ensure a steady income. Start estimating healthcare costs and consider long-term care insurance.


10x annual salary

Finalize your retirement income strategy, including pensions, social security, and other sources of income. Ensure your savings can support your desired lifestyle. Plan for estate and legacy considerations.

Additional tips:

  • Review and adjust regularly: It’s crucial to review your savings and investment strategies regularly to ensure you’re on track to meet your goals.
  • Automate savings: Setting up automatic transfers to your retirement accounts can help maintain consistent savings habits.
  • Seek professional advice: Working with a financial advisor can provide personalized guidance and help optimize your retirement plan.

How much to save for retirement each month

To reach your retirement savings goals, it’s essential to determine how much to save for retirement each month. Here are the steps to calculate your monthly savings:

1. Calculate your savings gap: Determine the difference between your current savings and your target retirement savings. For instance, if your target is €1 million, and you currently have €200 000 saved, your savings gap is €800 000.
2. Estimate investment returns: Assume an average annual return on your investments. A conservative estimate might be 5-7% per year, depending on your investment strategy.
3. Determine the number of months until retirement: Calculate the number of months remaining until your desired retirement age. If you are 40 years old and plan to retire at 67, you have 27 years, or 324 months.
4. Use a retirement calculator: Plug these numbers into a retirement calculator to determine how much you need to save each month. For example, with an €800 000 savings gap, 324 months until retirement, and an average annual return of 6%, you would need to save approximately €1 200 per month.

Remember, this is a simplified approach. Adjust your savings plan based on changes in your income, expenses, and investment returns. Regularly reviewing your progress and making adjustments will help ensure you stay on track to meet your retirement savings goals.

Retirement income strategies

Once you’ve accumulated your savings, the next step is to develop effective retirement income strategies to ensure your funds last throughout retirement. Consider the following approaches:

  • Annuities: Annuities provide a steady income stream for a specified period or for life. They can be a good option if you want guaranteed income. Different types of annuities, such as fixed, variable, and indexed, offer varying levels of risk and return.
  • Withdrawal rate: A common strategy is the 4% rule, which suggests withdrawing 4% of your savings annually. This approach aims to ensure that your savings last for at least 30 years. Adjust this rate based on market conditions and personal needs.
  • Social security and pensions: Factor in your expected social security benefits and any workplace pensions. State pensions vary by country but can form a crucial part of your retirement income.
  • Dividend-paying stocks and bonds: Invest in dividend-paying stocks and bonds to generate a regular income stream. This approach can supplement your retirement income and provide some growth potential.
  • Real estate income: Rental properties can provide a steady income. Consider the potential for property appreciation and rental income, but also factor in maintenance and management costs. Platforms like Mintos allow you to invest in real estate passively, earning rental income without the hassle of property management.

By combining these strategies, you can create a diversified income stream that supports your retirement lifestyle. Regularly review your income sources and adjust your strategies to maintain financial stability throughout retirement.

Retirement planning for beginners

If you’re new to retirement planning, the process can seem overwhelming. Here are some tips for retirement planning for beginners:

1. Start early: The earlier you start saving, the more time your money has to grow. Compound interest can significantly increase your savings over time.
2. Set clear goals: Define your retirement goals, including your desired retirement age and lifestyle. Determine how much income you’ll need in retirement to maintain your desired lifestyle.
3. Create a budget: Develop a budget to track your expenses and savings. Identify areas where you can cut costs and redirect that money into your retirement savings.
4. Invest wisely: Diversify your investments to balance risk and growth potential. Consider a mix of stocks, bonds, and real estate to create a balanced portfolio.
5. Take advantage of employer contributions: If your employer offers a pension scheme or matches retirement contributions, make sure you contribute enough to get the full match. This is essentially free money that can significantly boost your retirement savings.

Early retirement planning: FIRE

For those aiming for early retirement, the financial independence, retire early (FIRE) movement offers a roadmap. The FIRE strategy involves:

  • Aggressive saving: Save a significant portion of your income, often 50% or more. This requires strict budgeting and prioritizing savings over discretionary spending.
  • Frugal living: Reduce expenses to increase savings. This may involve downsizing your home, cutting back on dining out, or eliminating non-essential expenses.
  • Investing wisely: Focus on investments that provide high returns. Educate yourself on different investment options and strategies. Consider taking courses, reading books, or following financial blogs to improve your investment knowledge.
  • Maximize income: Look for ways to increase your income through side hustles, career advancements, or passive income streams. The more you earn, the more you can save and invest.

Early retirement requires meticulous planning and discipline but can offer the freedom to retire well before traditional retirement age.

Retirement withdrawal strategies

Effective retirement withdrawal strategies are essential to ensure your savings last. Consider the following:

  • Systematic withdrawals: Regularly withdraw a fixed percentage of your savings. This method ensures a consistent income stream and helps manage your budget. The 4% rule is a common approach, where you withdraw 4% of your total savings each year.
  • Bucket strategy: Divide your savings into different “buckets” based on when you’ll need the money. For example, have one bucket for short-term needs, another for midterm expenses, and a final one for long-term growth. Invest each bucket according to its time horizon and risk tolerance.
  • Required minimum distributions (RMDs): Understand the rules for RMDs from retirement accounts to avoid penalties. In Europe, RMD rules vary by country, so be sure to check local regulations.
  • Income from investments: Utilize dividend-paying stocks and bonds, as well as rental income from real estate, to supplement your retirement withdrawals.

Retirement savings tips

To maximize your retirement savings, consider these retirement savings tips:

1. Automate savings: Set up automatic transfers to your retirement accounts. This ensures you consistently save a portion of your income without having to think about it.
2. Review and adjust: Regularly review your savings and investment strategies. Adjust your contributions and investment choices based on changes in your financial situation, goals, and market conditions.
3. Seek professional advice: Consider working with a financial advisor for personalized guidance. They can help you create a comprehensive retirement plan and make informed investment decisions.
4. Increase contributions with raises: When you receive a salary increase, allocate a portion of the raise towards your retirement savings. This can help accelerate your savings growth without impacting your current lifestyle.
5. Manage debt: Pay off high-interest debt as quickly as possible. Reducing debt can free up more money to contribute to your retirement savings.

Retirement savings in 2024

As you plan for retirement, consider the trends and changes in retirement savings in 2024. Economic conditions, investment options, and policy changes can impact your retirement strategy. Here are some key factors to keep in mind:

1. Economic conditions: Stay informed about the economic outlook, including interest rates, inflation, and market performance. These factors can influence your investment returns and purchasing power.
2. Investment options: Explore new and evolving investment opportunities. Alternative investments, such as private equity, hedge funds, cryptocurrency, and commodities, can diversify your portfolio and potentially offer higher returns. Sustainable and ethical investing is also gaining popularity.
3. Policy changes: Keep an eye on changes in pension regulations, tax laws, and retirement benefits. These changes can affect your retirement planning and may require adjustments to your strategy.
4. Technology and innovation: Advances in financial technology can provide new tools and resources for retirement planning. Utilize apps and platforms to track your investments, automate savings, and gain insights into your financial health.
5. Healthcare advancements: Improvements in healthcare can impact your retirement duration and expenses. Consider how longer life expectancy and new medical treatments may affect your retirement savings needs.

Linking back to investing

Investing plays a crucial role in reaching your retirement goals. By incorporating various investment strategies, you can grow your savings and potentially retire earlier.

Ready to boost your retirement savings? Start investing with Mintos today and explore a range of investment options designed to help you achieve your retirement goals. For more insights and guidance, visit our blog for additional resources.


This is a marketing communication and in no way should be viewed as investment research, advice, or recommendation to invest. The value of your investment can go up as well as down. Past performance of financial instruments does not guarantee future returns. Investing in financial instruments involves risk; before investing, consider your knowledge, experience, financial situation, and investment objectives.

1 Note: The specific retirement age can vary based on factors such as country, personal circumstances, and financial goals. Adjust the benchmarks accordingly to fit your unique situation.

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