A Practical Retirement Planning Guide
The 25× rule
Add up your yearly retirement spending and multiply by 25. That's a rough target for your portfolio, based on the well-known 4% safe-withdrawal rate. If you spend $50,000 a year, aim for $1.25M.
Why 4% works
The Trinity Study showed that a 60/40 portfolio survives 30-year retirements at a 4% initial withdrawal, adjusted for inflation, in over 95% of historical periods. It's a starting point, not a guarantee.
Bucket your accounts
- Tax-deferred (401k, traditional IRA) — deduct today, pay tax later
- Tax-free (Roth) — pay today, withdraw untaxed
- Taxable brokerage — flexibility, capital gains rates
A mix hedges tax law risk, which is real and unpredictable.
Match then max
Always capture the full employer 401(k) match — it's a 100% return before any market move. Then fill a Roth, then top up the 401(k) to the annual limit.
Adjust as life changes
Kids, mortgages, and career pivots move the target. Re-run the retirement calculator every year in December and update the number.
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