How Much Do You Actually Need to Retire Abroad: The Number
Published on: June 29, 2026
Every aspiring expat retiree eventually asks the same question: what's the number? How much do I actually need before I can leave the office for good and live by the sea? The honest answer is that it's a calculation, not a magic figure, and the single biggest variable is one you control: how much you spend. Retiring abroad can shrink that number dramatically, which is exactly why it's so appealing. Here's how the math really works in 2026.
Start with the spending, not the savings
Your number is driven by your annual spending in retirement, not by some headline "you need $1 million" rule. Two retirees with identical savings can have wildly different outcomes because one spends 25,000 euros a year and the other 70,000. So the first task isn't "how much do I have?", it's "how much will I spend?" in the country and lifestyle you're aiming for.
This is where moving abroad changes everything: if your target country costs meaningfully less to live in than home, your required nest egg falls in direct proportion.
The 4% rule: the famous starting point
The most-cited framework is the 4% rule, from financial adviser William Bengen's 1994 research (later popularised by the "Trinity Study"). In its classic form:
Withdraw 4% of your starting portfolio in year one, then increase that dollar amount by inflation each year. On a balanced stock/bond portfolio, this had a very high probability of lasting a 30-year retirement in historical backtests.
Flip it around and you get the rule of thumb most people actually use, "the number":
Annual spending × 25 = the portfolio you need.
Because 4% is 1/25. Spend 30,000 euros a year from your portfolio? You need roughly 750,000 euros invested. Spend 50,000? About 1.25 million. That simple multiplier is the backbone of the whole calculation.
The important 2026 caveat: experts now disagree on the rate
Treat the 4% rule as a starting point, not gospel, because researchers have revised it in both directions and they don't agree:
- Bill Bengen himself raised his "worst-case safe" number to ~4.7% (with a more diversified portfolio), and has suggested current retirees might reasonably start higher still.
- Morningstar's forward-looking research lands lower, around 3.9% for 2026 (it has ranged from 3.3% to 3.9% in recent years), reflecting today's market valuations.
- Vanguard-style conservative models sit around 3.3-3.5%.
What this means practically:
- At 4%, you need 25x your spending.
- At a cautious 3.5%, you need about 28-29x.
- At a more aggressive 4.7-5%, you need roughly 20-21x.
So the "number" isn't one figure, it's a range depending on the withdrawal rate you choose and how conservative you want to be. If you're retiring early (a 40-50 year horizon rather than 30), lean toward the lower withdrawal rates (~3.0-3.5%) and the higher multiples, because a longer retirement has more chances to hit a bad market.
Subtract your guaranteed income first
Here's the step that quietly makes early or modest retirement possible: your portfolio only has to cover the gap your guaranteed income doesn't.
Map your guaranteed lifetime income, state/social-security pension, any workplace or private pension, annuities. Subtract that from your target annual spending. Only the remainder needs 25x (or your chosen multiple) of savings behind it.
Example: you want 40,000 euros/year abroad, and a pension will reliably pay 18,000/year. Your portfolio only needs to fund the 22,000 gap → roughly 550,000 euros at a 4% rate, not 1,000,000. The bigger your guaranteed income base, the smaller your required nest egg, and the more flexibility you have. (If you're moving a pension across borders, see moving your pension abroad and annuities in retirement abroad.)
How living abroad shrinks the number
This is the heart of the strategy. If your chosen destination lowers your annual spending, every euro of reduction is multiplied by ~25 in nest-egg terms.
- Cut annual spending by 10,000 euros by moving somewhere cheaper, and you've effectively reduced the savings you need by ~250,000 euros.
- Lower-cost destinations can turn a retirement that looked impossible at home into a comfortable one abroad.
A realistic way to think about destinations (verify current local figures, they move, in our real cost of living after you buy abroad guide):
- Lower-cost retirement destinations (parts of Southeast Asia, Latin America, and some southern/eastern European markets) can support a comfortable lifestyle on a fraction of a major Western-city budget.
- Mid-cost destinations (much of Mediterranean Europe) sit in between, with strong lifestyle for the money.
- Higher-cost destinations (prime Western European cities, top-tier hubs) may cost as much as or more than home.
Important honesty check: don't budget only the rent or the headline cost of living. Build in private health insurance (often required for a retirement visa and not optional once you leave your home system), property purchase and ownership costs if you're buying, currency risk if your income and spending are in different currencies, travel back home, and the fact that costs rise as you age, especially healthcare (see the cost of growing old abroad). A genuinely safe plan budgets for the full picture, not the brochure.
The risk that breaks retirements: sequence of returns
One more concept worth internalising. A bad market in the first few years of retirement does far more damage than the same drop later, because you're withdrawing from a shrunken portfolio (the "sequence-of-returns risk" or "retirement red zone"). Two defences:
- A cash/bond buffer of 1-3 years' spending, so you're not forced to sell investments into a crash.
- Flexible withdrawals (e.g. "guardrails": trim discretionary spending or skip an inflation increase after a down year). Research shows retirees who flex their spending can often start higher and last longer than those locked into a rigid rule.
Note: if you'll buy a rental property abroad, count its net rental income as a separate income stream (like a pension), not as part of your 25x portfolio. And if you plan to sell and downsize, only count the net proceeds you'll actually invest. Mind currency risk where your income and costs are in different currencies.
Putting it together: a 5-step calculation
- Estimate annual spending in your target country and lifestyle, all-in (housing, health insurance, daily living, travel, buffer for ageing).
- Subtract guaranteed income (pensions, social security, annuities) to find the gap your portfolio must fund.
- Choose a withdrawal rate for your horizon (~4% for a standard 30-year retirement; ~3.0-3.5% if retiring early).
- Divide the gap by that rate (or multiply by 25 / 28 / 21 accordingly) to get your portfolio number.
- Stress-test it: add a cash buffer, plan flexible spending, and account for currency and rising healthcare costs.
Frequently asked questions
What's the simplest way to estimate my retire-abroad number?
Annual spending × 25 (the inverse of the 4% rule), after subtracting guaranteed pension income from your spending target. Adjust the multiple up for early retirement or a more cautious withdrawal rate.
Is the 4% rule still valid in 2026?
It's a useful starting point, but experts disagree, Bengen now suggests ~4.7%+, Morningstar ~3.9% for 2026, conservative models ~3.3-3.5%. Treat it as a range and lean lower for long/early retirements.
Does moving abroad really reduce how much I need?
Yes, directly. Because of the 25x multiplier, every 10,000 euros you cut from annual spending reduces your required nest egg by roughly 250,000 euros.
What costs do people forget when budgeting?
Private health insurance (often visa-required), property purchase/ownership costs, currency risk, trips home, and rising healthcare costs with age. Budget the full picture, not just rent.
A note from JanusHermes
We wrote this because "the number" is the question behind every retire-abroad search, and the honest answer is a calculation you can do yourself. To pick the destination, pair it with the best countries to retire abroad and the real cost of living after you buy. JanusHermes is a cross-border real estate platform, not a financial, investment, or tax adviser. Explore retirement-friendly markets across 50+ countries on JanusHermes.
Disclaimer. This article is general educational information current as of mid-2026, not personalised financial, investment, or tax advice, and does not create any professional or advisory relationship. Safe-withdrawal-rate research is debated and based on assumptions that may not fit your situation; returns are not guaranteed and you can lose money. Cost-of-living figures vary widely and change. Before making retirement or relocation decisions, consult a qualified financial adviser and a cross-border tax professional for advice tailored to your circumstances. JanusHermes accepts no liability for any action taken in reliance on this content.
A note on the numbers: where no source is named, the market figures in this article (prices, yields, costs) are indicative estimates compiled from publicly available market data and industry reporting at the time of writing. Markets move and rules change, so treat them as a starting point and verify current figures with official sources before acting on them.