About the Retirement Calculator
This retirement calculator answers “How much do I need to retire?” and “How much should I save each month?”. It grows your retirement spending with inflation, subtracts Social Security or pension income, and finds the nest egg that lasts until your life expectancy. Your current 401(k), IRA and other savings are projected to retirement, and the gap is turned into a monthly savings target. The result is also shown with the popular 4% rule used by the FIRE community.
How to use
- Enter your current age, the age you want to retire and how long the money should last (life expectancy).
- Enter your monthly spending in retirement and any Social Security or pension income in today’s dollars, plus what you have saved for retirement so far.
- Set inflation and your expected returns before and during retirement (usually lower after retiring, with a more conservative portfolio).
- Read the monthly savings target, the nest egg needed, and the age-by-age balance table.
How the calculation works
- First-year spending = (monthly spending − Social Security) × (1 + inflation)years to retirement
- Nest egg = present value at retirement of all withdrawals until life expectancy, rising with inflation and discounted at the return during retirement
- Gap = nest egg − current savings grown at the pre-retirement return
- Monthly savings = the level monthly deposit that grows to the gap by retirement
Annual rates are converted to monthly compound rates ((1 + rate)1/12 − 1).
Example: age 35, retiring at 65, money lasting to 90, $4,000 a month in today’s dollars, 3% inflation, 7% return before and 4% after retirement, $50,000 saved. First-year spending will be about $9,709 a month, the nest egg about $2.59 million ($1.07 million in today’s dollars), and you need to save about $1,888 a month.
What is the 4% rule?
Financial planner William Bengen and the later Trinity study found that withdrawing 4% of a stock/bond portfolio in the first year of retirement, then adjusting for inflation, would have lasted at least 30 years in almost every historical period. Turned around, nest egg = annual spending × 25: spending $48,000 a year needs about $1.2 million. Early retirees planning for 40+ years often use 3–3.5% (× 28–33) instead.
Choosing your numbers
- Spending: many planners suggest 70–80% of your pre-retirement income; housing and healthcare (before Medicare at 65) are the biggest items.
- Social Security: check your personal estimate at ssa.gov; benefits rise each year you delay claiming, up to age 70.
- Inflation: the Federal Reserve targets 2%; 2.5–3% is a common long-term planning assumption.
- Returns: results are very sensitive to returns. Try a pessimistic case too, and remember 401(k) and traditional IRA withdrawals are taxed.
FAQ
How much do I need to retire?
With the 4% rule, about 25 times your annual spending not covered by Social Security or a pension. To spend $5,000 a month with $2,000 from Social Security you need roughly $36,000 × 25 = $900,000 in today’s dollars.
Why is the nest egg so large?
Because of inflation. At 3% a year, prices are about 2.4 times higher after 30 years, so the same lifestyle costs much more in future dollars. Compare with the value in today’s dollars shown next to it.
Does it include my 401(k) employer match?
Include it in the monthly savings: if the calculator says $1,500 a month and your employer matches $300, you need to contribute $1,200 yourself.
What if I want to retire early (FIRE)?
Enter your early retirement age and a long horizon, such as life expectancy 95. Set Social Security to 0 if it starts much later than your retirement, or use a lower withdrawal rate in the 4% rule view.