How much do I need to retire?

Multiply your expected annual retirement expenses by 25. This is based on the 4% safe withdrawal rate. For example, $60,000/year in expenses requires a $1,500,000 portfolio. Subtract guaranteed income like Social Security before calculating — if you expect $24,000/year from Social Security, you only need to fund $36,000/year from savings, requiring a $900,000 portfolio.

What is the 4% rule for retirement?

The 4% rule states you can withdraw 4% of your portfolio in year one of retirement, adjust for inflation each year, and your money should last 30+ years in most historical market scenarios. It originated from the 1998 Trinity Study. For retirements longer than 30 years, a 3.5% withdrawal rate is considered safer.

When should I claim Social Security?

Claiming at 70 vs 62 increases your monthly benefit by approximately 77%. The break-even point — where delaying pays off — is typically around age 78-80. If you expect to live past 80 and have other income to bridge the gap, delaying to 70 is usually the better financial choice. For married couples, the higher earner should generally delay to maximize the survivor benefit.

How much should I have saved for retirement by age?

According to Federal Reserve data, US median retirement savings by age are approximately: age 35: $45,000; age 40: $93,000; age 45: $145,000; age 50: $203,000; age 55: $290,000; age 60: $368,000. A common benchmark is to have 1x your salary saved by 30, 3x by 40, 6x by 50, and 10x by retirement.

What is a Monte Carlo simulation for retirement?

A Monte Carlo simulation runs your retirement plan through thousands of randomly generated market scenarios to show the probability your savings will last. Instead of assuming average returns every year, it models the full range of possible outcomes including bad sequences of returns. A success rate above 90% is considered very safe; above 80% is generally acceptable.

What are the 401k contribution limits for 2026?

For 2026, the 401k employee contribution limit is $24,500 (under age 50) or $32,500 (age 50+). Workers aged 60-63 can contribute up to $35,750 under the super catch-up provision. The IRA contribution limit is $7,500 ($8,600 if 50+). The HSA limit is $4,400 for individuals and $8,750 for families.

How does inflation affect retirement savings?

At 3% annual inflation, your purchasing power is cut in half every 24 years. For a 30-year retirement, $60,000 in expenses today would cost over $145,000 in year 30. To protect against inflation: stay invested in stocks throughout retirement, delay Social Security to maximize COLA-adjusted benefits, consider TIPS bonds, and use a realistic 2.5-3% inflation assumption in your retirement calculator.

Yes, retiring at 55 is achievable but requires more savings than a traditional retirement. With a 40-year retirement horizon, use a 3.5% withdrawal rate (28-30x annual expenses instead of 25x). Key challenges: no Medicare until 65 (budget $800-1,500/month for health insurance), no Social Security until 62 at earliest, and no penalty-free 401k access until 59.5 (except via the Rule of 55 for your current employer's plan).

October 24, 2026 · fireandretire.com

Capital Gains Tax in Retirement: How to Pay 0% Legally

One of the most underused opportunities in retirement is the 0% long-term capital gains rate. In the right income range, you can sell appreciated investments, realize the gain, and owe nothing in federal tax on it. This guide explains how the brackets work and how to use them deliberately.

How Capital Gains Tax Works

Long-term capital gains (assets held more than one year) are taxed at their own rates — separate from ordinary income. For 2026 there are three rates: 0%, 15%, and 20%. Short-term gains (held one year or less) are taxed as ordinary income, which is why "hold for a year" matters so much.

The key insight: your capital gains rate depends on your total taxable income, including the gains themselves. The 0% bracket is a band of income, and gains that fall inside it are untaxed.

The 0% Bracket for 2026

For 2026, the 0% long-term capital gains rate applies to taxable income up to:

Single: $49,450
Married filing jointly: $98,900

Above those thresholds, gains are taxed at 15% until the 20% threshold (roughly $545,500 single / $613,700 married for 2026). The exact figures are indexed for inflation each year.

A worked example

Imagine a retired couple with $40,000 of taxable income from a pension and IRA withdrawals, and $30,000 of long-term capital gains from selling index funds. Their total taxable income is $70,000 — under the $98,900 married threshold. The entire $30,000 gain is taxed at 0%. Their federal tax bill on the gain: zero.

Why Retirement Is the Ideal Time to Harvest Gains

During your working years, your income is usually too high to reach the 0% bracket. In retirement, income often drops — especially in the gap years before Social Security and RMDs begin (roughly ages 60–72). That window is prime time to realize gains at 0% or low rates.

Tax-gain harvesting, the mirror of tax-loss harvesting

Tax-loss harvesting sells losers to offset gains. Tax-gain harvesting does the opposite: you intentionally sell winners to lock in gains at 0%, then immediately rebuy (being careful about the 30-day wash-sale rule, which does not apply to gains, but resets your basis). The effect is a step-up in basis for free — you reset the cost basis higher so future gains are smaller.

The Catch: Social Security and IRMAA

Realizing gains is not free of consequences even at a 0% rate:

Social Security taxation. Higher total income (including gains) can push more of your Social Security benefit into the taxable range, effectively creating a "tax torpedo" where each extra dollar of gain raises taxes indirectly.
Medicare IRMAA. Once you're on Medicare, higher income two years prior can trigger Income-Related Monthly Adjustment Amounts — surcharges on Part B and Part D premiums.
ACA subsidies. If you're buying marketplace health insurance before 65, capital gains count toward the income that determines your subsidy.

So the 0% rate is real, but it pays to model the ripple effects before harvesting a large gain in a single year.

How to Plan a Gain-Harvesting Year

Estimate your ordinary taxable income for the year (pension, IRA/401k withdrawals, taxable interest, the taxable portion of Social Security).
Subtract that from the 0% threshold to find your available "free" gain room.
Sell appreciated assets up to that amount, then rebuy to reset basis.
Check the IRMAA and Social Security side effects — leave a buffer below any cliff.

Because your income varies year to year in retirement, gain harvesting is a year-by-year decision, not a one-time move. Run your numbers with our retirement planner to see how withdrawals, Social Security, and taxes interact.

The Bottom Line

The 0% capital gains bracket is one of the few genuinely free lunches in the tax code — but only if you plan for it. By keeping taxable income inside the threshold during low-income retirement years, you can move appreciated assets, reset your basis, and shrink future tax bills. Just watch the second-order effects on Social Security taxation and Medicare premiums, and you'll capture the benefit without giving it back.

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