Know your protection and retirement numbers

Where this step fits

Step 2 captures available employer compensation. Step 3 gives the rest of the Blueprint two measurable targets: the cash that protects your household and the portfolio that supports future freedom. Step 4 uses that clarity to focus on high-interest debt.

Find your full emergency-fund target

The starter emergency fund from Step 1 handles the first unexpected expense. The full emergency fund is designed for a longer income interruption. Build it from the monthly costs that must continue, not from total lifestyle spending.

Build the minimum monthly baseline

Add housing, utilities and core essentials such as groceries, insurance, essential transportation, required family costs, and minimum debt payments. Leave out optional lifestyle spending, extra debt payments, and investing because those amounts could pause during an emergency.

Use income diversity to choose three or six months

The MMA planning default uses six months when the household depends on one primary income or when multiple incomes share one employer. It uses three months when two or more meaningful income sources are independent. This is a planning heuristic, not a universal rule; variable income, dependents, health needs, or a harder-to-replace job may support holding more.

• One primary household income: six months.
• Multiple household incomes tied to the same employer: six months.
• Multiple independent employers or businesses: three months.
• Show the exact result, then round up to the next $1,000 for a simple buffer.

Find your retirement or financial-independence target

Estimate the annual amount you would want available in retirement or financial independence using prices you understand today. Then compound that spending by the inflation assumption through your target age. The calculator starts at 3%, but the assumption is adjustable.

Subtract reliable income at the right time

Social Security, pensions, and annuities can reduce the amount the portfolio must supply, but use a conservative estimate and the age the income actually begins. Income that starts after your target age does not cover the first years of retirement, and not every income stream increases with inflation.

Turn the remaining income gap into a portfolio target

Subtract reliable income available at the target age from inflation-adjusted lifestyle spending. Divide the remaining annual gap by the planning withdrawal rate. A lower withdrawal rate creates a larger target. The result is a planning estimate, not a guarantee, and should be reviewed as your life and assumptions change.