You can look at this as restore points or how many incrementals you want to keep on hand. For instance, 7 will keep the past days available to you to restore to and so on.
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Pulled from my notes
How many backups are retained in this configuration:
"This policy preserves at least the 7 most recent backups, as well as the most recent backup from each of the last:
8 weeks
6 months
4 quarters
1 year"
You would have 7 daily copies for the past week. 1 weekly for each of the last 8 weeks. 1 monthly for each of the last 6 months. 1 quarterly for each or the last 4 quarters. 1 yearly. It would be 26.
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