Want $7,500 in Monthly Retirement Income? Here's the Nest Egg You Need.
Key Points
One popular strategy says you should save 25 times your estimated annual retirement expenses.
You won't have to pay for all of your retirement expenses on your own.
This strategy is designed to work with the 4% rule, which may not be right for you.
You want to retire comfortably, and you do your best to save regularly. But it feels a little like you're flying blind. You're not sure how much you need, so you're never sure if you're doing enough.
This is an unfortunate, but natural part of preparing for a future full of unplanned expenses. Luckily, there is a way to get a rough idea of how much you should aim to save. Let's look at the example of someone who wants $7,500 per month in retirement income.
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How much do you have to save to get $7,500 per month in retirement?
When choosing a savings target, start by considering how much you expect to spend each month in retirement. This might not be the same as what you're living on today. Once you're retired, your required income could drop because you're no longer saving for retirement and other expenses, like supporting family members, may have disappeared. On the other hand, you may have new expenses, such as travel, to factor in.
For our purposes, let's say you wanted $7,500 in monthly retirement income. You probably won't have to pay for that entirely out of pocket. Most people qualify for a Social Security benefit that will help cover at least some of their costs. The average retirement benefit as of February 2026 is $2,076 per month. If we subtract that amount, that gives you $5,424 in monthly retirement expenses that you'd have to pay on your own. Multiply that by 12, and you get just over $65,000 in annual expenses that Social Security doesn't cover.
The next step is to multiply this amount by 25. This gives you a retirement savings target of about $1.63 million. That's a pretty large sum, but many people manage to get there through investing and consistent retirement account contributions.
How to ensure your retirement savings lasts
The above strategy for calculating your retirement savings target is designed to work with the 4% rule. This says that you can withdraw 4% of your savings in the first year of retirement. Then, you adjust this amount for inflation every year thereafter.
This is supposed to stretch your savings out over at least 30 years. However, it's not foolproof. That's why some people prefer to use a 3% or 3.5% withdrawal rate instead of a 4% withdrawal rate.
If you plan to do this, you'll need to save even more in order to retire with $7,500 per month in income. For example, if you plan to withdraw 3% of your savings in the first year of retirement, you'd need to save 33 times your estimated annual out-of-pocket expenses. That would give you a target of nearly $2.15 million.
Play around with a few scenarios until you find a number that feels workable for you. Then, do your best to make regular contributions and track your progress toward your goal as you go. If you notice you're falling behind, you may need to revise your original plan.
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