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

IRMAA: Why a Good Year Can Raise Your Medicare Premiums

Medicare premiums aren't flat. Higher-income retirees pay an Income-Related Monthly Adjustment Amount — IRMAA — on top of the standard Part B and Part D premiums. Because IRMAA uses your tax return from two years ago, a single large Roth conversion, property sale, or bonus can raise your Medicare costs long after the fact. Here's how to stay ahead of it.

What IRMAA Is

Part B (medical insurance) and Part D (prescription drug coverage) premiums are means-tested. If your modified adjusted gross income (MAGI) exceeds a threshold, you pay a surcharge. The more you earn, the higher the surcharge — up to several hundred dollars per month above the standard premium.

The Two-Year Lookback

This is the part that catches people. Your 2026 Medicare premiums are based on your 2024 tax return. So decisions you make in one year affect your premiums two years later. A retiree who does a big Roth conversion at 63 can find their Medicare premiums spiking at 65 — right when they enroll.

Why the thresholds matter

IRMAA is a cliff, not a gradual phase-in. Cross a threshold by one dollar and you jump to the next surcharge tier for the whole year. That makes "just under the line" a meaningful planning target, especially if you're near a boundary.

Who It Affects

Higher-income retirees whose MAGI exceeds the first threshold — roughly $106,000 single / $212,000 married for the relevant tax year (indexed annually).
Anyone doing large Roth conversions near or during Medicare age.
People who sell a business, rental property, or highly appreciated stock in a single year.
New retirees whose last working year's income was high, even though retirement income is now modest.

How to Avoid Surprise IRMAA

Model conversions against the IRMAA thresholds. When doing Roth conversions before Medicare, leave a buffer below the cliff rather than converting "up to" an income target.
Spread large income events. If you must realize a big gain, consider splitting it across two tax years to stay under a threshold in each.
Do the math on 63–64 especially. Income in the two years before you enroll at 65 determines your first Medicare premiums.
Coordinate with other cliffs. The same MAGI that triggers IRMAA can also trigger the net investment income tax and higher capital gains rates — plan the whole picture, not one program at a time.

If You Get Hit by IRMAA Unfairly: Form SSA-44

Sometimes IRMAA is based on income that no longer reflects reality — you retired, your spouse died, you divorced, or you lost a pension. In those cases you can request a reduction by filing Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event). Qualifying events include:

Work stoppage (retirement)
Reduction in work hours
Loss of income-producing property
Loss of pension income
Marriage, divorce, or death of a spouse

Submit SSA-44 with proof of the event, and Social Security can reduce or eliminate the surcharge for that year.

Why This Belongs in Your Retirement Plan

IRMAA is a tax on income decisions, and it's easy to trigger accidentally. Treating it as a known constraint — like a bracket or a contribution limit — lets you capture Roth conversions and gain harvesting at low rates without handing back the savings in Medicare premiums two years later.

Read the full Medicare guide for premium amounts and enrollment timing, and model how conversions interact with income thresholds in our Roth conversion calculator.

The Bottom Line

IRMAA is one more reason retirement tax planning is a multi-year puzzle. Know your thresholds, leave a buffer, and remember the two-year lookback. If a life-changing event makes the surcharge unfair, SSA-44 is your remedy — but avoiding the cliff in the first place is far easier.

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