Retirement Calculator

A common rule of thumb is 25 times your annual expenses, which assumes a 4 percent safe withdrawal rate. If you need 60,000 dollars a year to live, you need 1.5 million dollars saved. This is a rough guide. The real answer depends on your expected investment return in retirement, inflation, life expectancy, and any other income like Social Security or a pension.

The 4 percent rule comes from the Trinity Study, which found that a portfolio of 50 percent stocks and 50 percent bonds could sustain a 4 percent annual withdrawal rate (adjusted for inflation) for 30 years with high probability. Withdraw 4 percent of your starting balance in year one, then increase that dollar amount by inflation each year. The rule is a starting point, not a guarantee. Sequence of returns risk and longer retirements can break it.

Pre-retirement, an 8 percent return is reasonable for a growth-oriented portfolio heavy in stocks. Post-retirement, most people shift toward more bonds and use 5 to 6 percent. Be conservative. The biggest planning mistake is assuming high returns and discovering reality is lower. Use lower numbers and be pleasantly surprised, rather than higher numbers and run out of money.

Inflation quietly destroys retirement plans. At 3 percent inflation, prices double every 24 years. If you need 5,000 dollars a month today, in 30 years you will need over 12,000 dollars a month for the same lifestyle. This calculator adjusts withdrawals for inflation each year so your retirement income maintains real purchasing power.

As early as possible. Compound growth makes the first decade of contributions worth several times the last decade. Someone who saves from age 25 to 35 then stops typically ends up with more money than someone who saves from 35 to 65, simply because of compounding. The Cost of Waiting in our Compound Interest Calculator illustrates this directly.

If you are within 10 years of retirement, you can estimate Social Security from your earnings record (your statement at ssa.gov is accurate). If retirement is further away, the program may change, so plan with reduced benefits or treat Social Security as a buffer rather than a foundation. This calculator focuses on the nest egg itself. Add Social Security as a separate reduction to your monthly withdrawal need.

The calculator shows the exact age at which your savings deplete. If this is before your life expectancy, you have three levers: save more during working years, retire later (more accumulation, fewer years to fund), or reduce your retirement expenses. Adjust the inputs to find a combination that works. Real plans usually combine all three.

Like all retirement projections, this calculator assumes steady returns and inflation. In reality, both vary year to year and sequence of returns matters significantly. Use this as a baseline plan, then stress-test by lowering the return rate, raising inflation, or shortening the time to retirement. If your plan still works under pessimistic assumptions, you are well-prepared.