Retirement Readiness Guide
Savings adequacy · Income replacement · Withdrawal safety · Longevity · Healthcare planning
“Am I on track to retire?” is one of the most common — and most anxiety-inducing — financial questions people ask. The answer depends on five interconnected factors that together determine whether your money will last as long as you do. This guide explains each factor and how to improve your score in each area.
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Enter your age, savings, contributions, and spending to get a personalized 0—100 retirement readiness score with recommendations.
The five factors of retirement readiness
| Factor | Weight | What it measures |
|---|---|---|
| Savings adequacy | 30 pts | Projected balance vs. 25× inflation-adjusted spending target |
| Income replacement | 25 pts | Planned spending as % of pre-retirement income |
| Withdrawal rate safety | 20 pts | Portfolio withdrawal rate (ideally = 4%) |
| Longevity coverage | 15 pts | How many years your portfolio is projected to last |
| Healthcare planning | 10 pts | Coverage plan before and during Medicare |
| Score range | Status | What it means |
|---|---|---|
| 85—100 | Retirement Ready | All five factors look strong; keep monitoring annually |
| 70—84 | On Track | Minor gaps; a few targeted improvements will close them |
| 55—69 | Getting There | Meaningful gaps in 1—2 areas; act now for better outcomes |
| 40—54 | Needs Work | Multiple significant gaps; changes in savings or spending needed |
| 0—39 | At Risk | Fundamental changes required — retire later, save more, or spend less |
Dollar basis & inflation: your projected balance is in future (nominal) dollars — savings and contributions grown at your expected return. Your planned spending and Social Security are entered in today's dollars and grown to your retirement year at your inflation assumption (default 3%), so the savings target, the withdrawal gap and the longevity projection are all on the same nominal basis. The longevity simulation uses your own return and inflation assumptions. The score is a simplified educational heuristic, not a probability of retirement success — for a full year-by-year projection with taxes and market variability, use the full retirement calculator.
Savings adequacy (30 points)
The most heavily weighted factor measures whether your projected portfolio balance at retirement will be large enough to sustain your planned spending. The benchmark is the 25× rule: you need roughly 25 times your annual retirement spending saved — the inverse of the 4% safe withdrawal rate. Because your projected balance is in future dollars, the target is your today's-dollar spending grown to your retirement year at your inflation assumption, then multiplied by 25.
Savings benchmarks by age (1× = annual income)
| Age | Fidelity benchmark | Aggressive benchmark |
|---|---|---|
| 30 | 1× salary | 1.5× |
| 35 | 2× | 2.5× |
| 40 | 3× | 4× |
| 45 | 4× | 6× |
| 50 | 6× | 8× |
| 55 | 7× | 10× |
| 60 | 8× | 13× |
| 67 | 10× | 15× |
How to improve this score:
- Max out 401(k) contributions — especially catch-up contributions at 50+
- Enable auto-escalation: increase your savings rate 1% per year automatically
- Delay retirement by 2—3 years: fewer years of withdrawals + more years of contributions
- Reduce planned retirement spending — eliminating $5,000/yr of spending reduces required savings by $125,000
Income replacement (25 points)
This factor looks at your planned retirement spending as a percentage of your current income. Traditional guidance targets 70—80% income replacement — lower than your working income because you're no longer saving for retirement, paying payroll taxes, or commuting.
| Spending / current income | Assessment | Points |
|---|---|---|
| = 60% | Excellent | 25 |
| 61—75% | Good | 22 |
| 76—85% | Moderate | 18 |
| 86—100% | Elevated | 12 |
| > 100% | Unsustainable | 5 |
If your planned spending is above 85% of your income, consider whether there are meaningful costs that will actually drop in retirement: mortgage payoff, children's expenses, commuting, professional clothing, retirement savings contributions themselves (8—10% of income gone immediately).
Withdrawal rate safety (20 points)
Your withdrawal rate is the percentage of your portfolio you'll need to draw each year to cover the spending gap after Social Security and any other guaranteed income. Research from the Trinity Study found that 4% or less has historically sustained a portfolio for 30 years in nearly all market scenarios.
| Withdrawal rate | Assessment | Points |
|---|---|---|
| = 3.5% | Very safe | 20 |
| 3.51—4.0% | Safe (4% rule) | 17 |
| 4.01—4.5% | Borderline | 13 |
| 4.51—5.0% | Elevated risk | 9 |
| 5.01—6.0% | High risk | 4 |
| > 6.0% | Unsustainable | 0 |
Formula: Withdrawal rate = retirement-year spending gap ÷ projected portfolio balance, where the spending gap is (annual spending − Social Security) grown to your retirement year at your inflation assumption. Increasing your Social Security benefit by delaying to age 70 can meaningfully reduce your required withdrawal rate. Test how inflation and lower returns affect your withdrawal plan.
Longevity coverage (15 points)
This factor estimates how many years your portfolio will last given your projected balance, the retirement-year spending gap, and your own expected-return and inflation assumptions (the withdrawal grows with inflation each year). A 65-year-old couple has a 50% chance at least one spouse reaches 92 — so targeting 30 years of coverage is prudent.
| Projected duration | Assessment | Points |
|---|---|---|
| 30+ years | Excellent | 15 |
| 25—29 years | Good | 12 |
| 20—24 years | Moderate risk | 8 |
| 15—19 years | High risk | 4 |
| < 15 years | Severe risk | 0 |
If your longevity score is low, this is the most urgent area to address. A portfolio that runs out at age 80 leaves you relying entirely on Social Security — often under $2,500/month. The fix usually requires either more savings or lower withdrawal rates, not just optimism about market returns.
Healthcare planning (10 points)
Healthcare is the most underestimated retirement expense. If you retire before 65, you face unsubsidized health insurance costs that can easily reach $1,000—$2,000/month. Even after Medicare at 65, premiums, deductibles, and out-of-pocket costs add up to significant annual spending.
| Healthcare situation | Points |
|---|---|
| No plan yet | 0 |
| Considering options (ACA, COBRA, etc.) | 3 |
| Enrolled in ACA / spouse's employer plan | 6 |
| Retiree health benefit from employer/pension | 8 |
| Retiring at 65+ — Medicare covered | 10 |
ACA subsidy strategy for early retirees: ACA marketplace subsidies are income-based. With the enhanced pandemic-era credits expired, 2026 coverage brings back the hard 400%-of-federal-poverty-level cliff (about $62,600 for a single person, $84,600 for a couple, using the 2025 poverty guidelines). Keeping MAGI below that line through careful Roth conversion and withdrawal planning can be worth thousands per year — and going even $1 over means no premium tax credit at all.
Find out where you stand
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