Every retirement plan contains a number that determines whether the plan works. It is the annualized return your portfolio must achieve — not might achieve, not could achieve, but must achieve — to fund your planned withdrawals for the rest of your life without running out of money.
Most investors have never seen this number. Their advisor has never shown it to them. It is implied in the projections, buried in the assumptions, but never stated explicitly as a single, testable figure.
At Rulicent, we call it the Required Return. And we believe it is the most important number in your financial plan.
Why Most Advisors Don't Calculate It
The conventional approach to retirement planning works backward from a risk tolerance questionnaire. The advisor asks how you would feel if your portfolio dropped 20%. Based on your answer, they assign a model portfolio — 60/40, 70/30, 80/20 — and then project forward using historical average returns for that allocation.
The problem is that this process never asks the fundamental question: what return does this specific investor, with this specific portfolio, this specific withdrawal need, and this specific time horizon, actually require? The model portfolio is selected based on emotional tolerance, not mathematical necessity.
The result is that millions of retirement investors are holding portfolios that feel appropriate but have never been tested against the actual return they need. They may be taking more risk than necessary. Or — more commonly and more dangerously — they may be taking less risk than their situation demands, holding a conservative allocation that cannot deliver the return their retirement requires.
How the Required Return Is Calculated
The Required Return is derived from three inputs: your current portfolio value, your planned annual withdrawal in retirement, and the number of years you expect to be in retirement.
The calculation finds the annualized growth rate that allows your portfolio to sustain your planned withdrawals over your entire retirement horizon without being depleted. It accounts for the present value of your future income stream and works backward to find the minimum growth rate that makes the math work.
A simplified example: a 60-year-old with $800,000 in investable assets who plans to withdraw $70,000 per year starting at age 65 and expects to live to 90 has a 25-year retirement horizon. The Required Return for this investor — the minimum annualized growth rate needed to fund that income stream — is approximately 8.2%. That is the number their portfolio must deliver. Not the number they hope it delivers. The number it must deliver.
What the Number Tells You
Once you know your Required Return, you can evaluate your current strategy with clarity. There are three possible outcomes:
If your Required Return is below 4.5%, your retirement is relatively well-funded. A traditional diversified portfolio has historically achieved this range, and while sequence of returns risk still applies, the mathematical demand on your portfolio is manageable.
If your Required Return falls between 4.5% and 7.5%, you are in what we call the elevated risk zone. A traditional 60/40 portfolio may fall short — especially after accounting for inflation, fees, and the real possibility of a significant market decline in the years surrounding your retirement date. This is the zone where the strategy matters most.
If your Required Return exceeds 7.5%, your portfolio is under significant mathematical pressure. Reaching this target requires a disciplined, adaptive strategy. A static allocation is not designed to deliver returns in this range reliably over a full retirement horizon.
The Gap Is the Problem
The most dangerous situation in retirement planning is not a high Required Return. It is a gap between the Required Return and the return the current strategy is actually designed to deliver — a gap the investor does not know exists.
An investor with a Required Return of 7.8% holding a conservative 40/60 portfolio designed to deliver 4.5% has a 3.3% annual gap. Over a 25-year retirement, that gap does not stay constant — it compounds. The shortfall grows larger every year. And because the investor does not know the gap exists, they have no reason to address it.
This is the retirement plan paradox: the plan feels responsible, the allocation feels prudent, and the investor feels secure — right up until the moment the math catches up.
Finding Your Number
Rulicent's Required Return Calculator is available at no cost on this website. It takes four inputs — current portfolio value, planned annual withdrawal, years to retirement, and years in retirement — and calculates your Required Return in seconds. It then classifies your result into one of three zones and explains what the number means for your retirement strategy.
If you want a more complete analysis — one that accounts for Social Security income, existing pension benefits, and a stress-tested evaluation of your current allocation — the Portfolio Evaluation goes further. It is a no-obligation conversation conducted personally by Dustin Wigington that produces a one-page summary of your Required Return and a clear assessment of whether your current strategy can deliver it.