Multiply your expected annual retirement spending by 25. If you plan to spend $50,000 a year in retirement, you need $1,250,000 saved. That is the 4% rule: a portfolio of 25 times your annual spending lets you withdraw 4% in year one and adjust for inflation after that.

The top guides give the 25-times table but stop there. One leading guide is written for UK readers and uses UK pension figures. The US guides give the formula but never show the monthly saving path to reach the target, and none of them work the Social Security offset into the same example. This guide does both, with every number worked out.

The 4% rule comes from financial planner William Bengen's 1994 research on historical US stock and bond returns. It states that withdrawing 4% of your portfolio in the first year of retirement, then adjusting that amount for inflation each year, gives your money a very high chance of lasting 30 years. The 25-times rule is the same idea flipped around: 1 divided by 0.04 equals 25.

Use this table to find your target. Take your expected annual spending in retirement and multiply by 25. Spending $30,000 a year needs $750,000 saved, which pays $2,500 a month. Spending $40,000 a year needs $1,000,000, which pays $3,333 a month. Spending $50,000 a year needs $1,250,000, which pays $4,167 a month. Spending $60,000 a year needs $1,500,000, which pays $5,000 a month. Spending $80,000 a year needs $2,000,000, which pays $6,667 a month.

Worked example: Sara is 30, earns $60,000 a year, and plans to spend $60,000 a year in retirement. Without any other income, her target is 25 times $60,000, which is $1,500,000. Now subtract Social Security. An average benefit of about $24,000 a year leaves $36,000 a year for her portfolio to cover. Multiply $36,000 by 25 and her real target is $900,000, which is $600,000 less than the headline number.

Now work out the monthly saving. To reach $900,000 by age 65 starting at 30, saving every month at a 7% average annual return, Sara needs $499.71 a month, or about $500 a month. If she waits until 40 to start, the same $900,000 target needs $1,111.01 a month. Ten years of waiting more than doubles the monthly cost.

Do not forget inflation. At 3% annual inflation, $50,000 of spending today costs $121,363.12 a year in 30 years. Build your target from future spending, not today's spending. Also budget healthcare separately: it is the most underestimated retirement expense, and Fidelity estimates a 65-year-old couple retiring today will spend about $315,000 on healthcare over their retirement.

If you plan to retire early, the 4% rule is too loose. It was designed for a 30-year retirement. Retiring at 55 can mean a 35 to 40 year retirement, so many researchers suggest a 3.3% to 3.5% withdrawal rate instead, which means saving 28 to 30 times your annual spending.

Q: What is the 4% rule for retirement?

A: The 4% rule says you can withdraw 4% of your portfolio in your first year of retirement, then adjust for inflation each year, and your money should last about 30 years.

Q: How much do I need to retire on $50,000 a year?

A: You need $1,250,000, which is 25 times $50,000. If Social Security covers part of that spending, subtract it first and multiply only the remainder by 25.

Q: How much should I save a month to retire at 65?

A: It depends on your target and your starting age. To reach $900,000 by 65 at a 7% average return, save about $500 a month from age 30, or about $1,111 a month from age 40.

Q: Does Social Security reduce how much I need to save?

A: Yes. Every $1,000 a year of Social Security income reduces your savings target by $25,000, because $1,000 times 25 equals $25,000.