Retirement Calculator

A widely cited guideline is to aim for a retirement portfolio worth 25 times your annual expenses. If you spend $50,000 per year, that means a target of $1.25 million. This figure comes from the 4% rule, which states that withdrawing 4% of your portfolio in the first year of retirement (then adjusting for inflation each year after) gives you a high probability of not running out of money over a 30-year retirement.

Your actual number depends on when you plan to retire, what income sources you will have (Social Security, pensions, rental income), and what lifestyle you want. Someone retiring at 55 needs more savings than someone retiring at 67 because the money has to last longer and there may be a gap before Social Security begins.

Use this calculator to test different scenarios. Try adjusting your monthly contribution, expected return, and retirement age to see how each variable affects the final balance.

The 4% rule originated from a 1994 study by financial planner William Bengen. He analyzed historical stock and bond returns going back to the 1920s and found that a retiree who withdrew 4% of their portfolio in the first year of retirement, then adjusted that dollar amount for inflation each subsequent year, would not have run out of money over any 30-year period in the data.

The rule is a starting point, not a guarantee. In periods of low market returns or high inflation, a 4% withdrawal rate may be aggressive. Some financial planners now suggest 3.5% as a more conservative target. On the other hand, retirees who remain flexible, cutting spending slightly in down markets, often do well with 4% or even a bit more.

This calculator uses the 4% rule to convert your projected savings into an estimated monthly retirement income, giving you a tangible sense of what your nest egg can support.

Compound growth is the engine behind retirement savings. When your investments earn returns, those returns get reinvested and generate their own returns. Over decades, this snowball effect is enormous. A single $10,000 investment earning 7% annually grows to roughly $76,000 in 30 years without adding another dollar.

The key variable is time. Someone who starts saving $500 per month at age 25 will have far more at 65 than someone who starts saving $1,000 per month at age 40, even though the late starter contributes more total dollars. This is why financial advisors stress starting early, even if the amounts feel small.

The calculator shows this effect clearly. Try entering a current age of 25 versus 35 with the same monthly contribution and watch how the extra decade of compounding changes the result.

Tax-advantaged accounts are the primary vehicles for retirement savings. In 2026, you can contribute up to $23,500 to a 401(k) and $7,000 to an IRA (or $8,000 if you are 50 or older). If your employer offers a 401(k) match, contribute at least enough to capture the full match — it is an immediate 50% or 100% return on your money.

Workers aged 50 and older can make catch-up contributions of an additional $7,500 to a 401(k) and $1,000 to an IRA. These extra allowances exist specifically to help people who got a late start or want to accelerate savings as retirement approaches.

Traditional accounts give you a tax deduction today but tax withdrawals in retirement. Roth accounts use after-tax dollars now but grow and distribute tax-free. The best choice depends on whether you expect your tax rate to be higher or lower in retirement.

Social Security replaces about 40% of pre-retirement income for the average earner. You can claim benefits as early as age 62, but your monthly check will be permanently reduced by up to 30% compared to waiting until your full retirement age (currently 67 for anyone born in 1960 or later). Delaying benefits past 67 up to age 70 increases your check by about 8% per year.

Your optimal claiming age depends on health, other income sources, and whether you have a spouse whose benefits may be affected. Many financial planners recommend delaying if you are in good health and have other funds to bridge the gap, because the higher monthly benefit acts as longevity insurance.

When using this calculator, remember that the projected savings balance is only one piece of the picture. Adding expected Social Security income gives a more complete view of your retirement readiness.