How Much Do I Need to Retire? (The 25x Rule)
The most common retirement question — "How much do I need?" — has a surprisingly simple answer. A rule of thumb called the 25x rule says: save 25 times your annual expenses.
If you can live on 72,000 riyals a year, you need roughly 1.8 million riyals. Here's how the math works and how to find your own number.
The 25x Rule
The 25x rule comes from the 4% safe withdrawal rate in reverse. If you withdraw 4% of your savings each year (the 4% rule), then your savings must be 25× your annual spending (because 100% ÷ 4% = 25).
So:
- Figure out your annual expenses in retirement
- Multiply by 25
- That's your target number
Your Number, by Monthly Expenses
| Monthly expenses | Annual | Retirement target (25x) |
|---|---|---|
| 6,000 riyals | 72,000 | 1,800,000 |
| 8,000 riyals | 96,000 | 2,400,000 |
| 10,000 riyals | 120,000 | 3,000,000 |
💡 Find your exact number: Use the retirement calculator to project your balance from your current savings and monthly contributions.
Why Expenses Matter More Than Income
Most people try to retire on a percentage of their salary, but the number that actually matters is what you spend. If you earn 20,000 riyals a month but live on 8,000, you only need to replace the 8,000 — not the 20,000.
That's why the 25x rule is based on expenses, not income. Track what you actually spend, then multiply.
Adjust for Your Situation
The 25x rule is a starting point, not gospel. Adjust it:
- Retiring early (before 55)? Use 30x–33x — your money must last longer.
- Have other income (pension, rental income)? Subtract it, lowering your target.
- Expect lower spending later? You can aim slightly below 25x.
Frequently Asked Questions
How much money do I need to retire comfortably? As a rule of thumb, 25× your annual expenses. If you need 96,000 riyals a year, aim for about 2.4 million in savings and investments.
Is 25x really enough? It's a widely used guideline based on the 4% rule, but it's not a guarantee. For early or long retirements, many planners recommend 30x–33x to be safer.
Does my pension count toward my number? Yes. Subtract any guaranteed income (pension, rental income) from your annual expenses before multiplying by 25. You only need savings to cover the gap.
Calculate your retirement target with the RateLedger retirement calculator.