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How much money do you need to retire at 65? Traditional advice suggests saving 25 times your annual expenses, but this assumes a 15- to 20-year retirement that no longer matches reality. With Americans increasingly living into their 90s and beyond, retirement planning now requires 30–40 years of income instead.
This shift means the old 4 percent withdrawal rule may be too aggressive, and the three-stage life model of learn, work, and retire is becoming obsolete. The multi-stage life approach treats retirement as multiple phases requiring different strategies rather than one long vacation. Most people now need 30 times annual expenses or more, paired with flexible withdrawal strategies that adapt to longevity risk and health care cost inflation.
Why the Old Retirement Model Is Broken
The three-stage life model assumes people learn until age 22, work until 65, then retire for 15–20 years. This framework made sense when life expectancy was 75, but it fails when people regularly live to 90 or 100.
