How much do you actually need to retire? A year-by-year answer, not a rule of thumb.
Ask "how much do I need to retire" and you'll usually get the same answer back: multiply your annual spending by 25, or take 4% of your savings as a safe withdrawal rate. Both versions of the same rule of thumb, both easy to remember, and both blind to almost everything that actually determines your real number — your Social Security timing, which accounts your money sits in, and how long your money actually needs to last.
Below is a real household, run through an actual retirement simulation — not an illustration — to show how far off the flat rule can land.
The household
Pat, 62, and Alex, 60, are ready to retire now. Between them they have $1,200,000 saved, split across four accounts with very different tax treatment:
| Checking & savings (cash) | $60,000 |
| Joint taxable brokerage | $350,000 |
| Pat's traditional IRA | $650,000 |
| Pat's Roth IRA | $140,000 |
| Total | $1,200,000 |
Both plan to claim Social Security at their full retirement age of 67 — Pat's benefit will be $2,400/month, Alex's $1,800/month, so roughly $50,400/year combined once both are claiming.
What the flat rule says
The 4% rule says: take 4% of $1,200,000, and that's your safe annual spending.
| 4% of $1,200,000 | $48,000/year |
That's the entire calculation. It doesn't ask when Pat and Alex claim Social Security, doesn't know $650,000 of that total sits in a traditional IRA (taxed as ordinary income on withdrawal) versus $140,000 in a tax-free Roth, and doesn't know whether their plan needs to last 20 years or 35.
What a real simulation says
Running Pat and Alex's actual accounts, ages, and Social Security timing through 2,000 simulated market paths (Runway's own Monte Carlo engine, targeting a 90% chance the money lasts through age 95) gives a very different number:
| Real sustainable spending, 90% confidence | $86,719/year |
| vs. the flat 4% rule | $48,000/year |
| Difference | +$38,719/year (81% more) |
The flat rule wasn't cautious — it was simply missing information. At $48,000/year, this household's real simulated success rate comes back at 100%: they were on track to leave a large amount of money unspent, not because they were being careful, but because the rule never accounted for $50,400/year in future Social Security income at all.
The part a percentage can't give you: which account, and when
A safe withdrawal rate is still just one number. The more useful question is what actually happens each year. In year one, before either of them claims Social Security, Runway's withdrawal sequencing draws:
Year 1 (Pat 62, Alex 60)
| Checking & savings | $60,000 (cash-first) |
| Joint taxable brokerage | $32,959 (long-term capital gains) |
| Total withdrawn | $92,959 |
| Federal tax owed | $0 |
Cash and long-term capital gains only — the traditional IRA stays untouched, so there's no ordinary income this year at all.
Year 6 (Pat 67, Alex 65 — Social Security has started)
| Total withdrawn from accounts | $65,946 |
Once Pat's Social Security starts, the portfolio needs to cover a smaller share of spending — the withdrawal drops by about $27,000 in a single year, with no change in lifestyle at all.
That's the actual answer to "how much do I need": not one number, but a sequence of numbers, one per year, that changes as Social Security phases in, tax brackets fill up, and the plan ages — computed from this household's real accounts, not assumed from a multiple.
See your own year-by-year number. Enter your real accounts and Social Security details and Runway will run the same simulation for you — free to start, no credit card required.
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