Retirement Calculator

A common rule of thumb is to aim for 70-80% of your pre-retirement income annually. For example, if you earn $80,000 per year, you would need $56,000-$64,000 annually in retirement. To generate this income, you might need $1.4-$1.6 million in savings (using the 4% withdrawal rule). However, your actual needs depend on your lifestyle, health, location, and whether you have other income sources like Social Security or pensions. Use this calculator to estimate your specific needs based on your current situation and goals.

The 4% rule suggests you can safely withdraw 4% of your retirement savings in the first year, then adjust that amount for inflation each year, with a low risk of running out of money over a 30-year retirement. For example, with $1 million saved, you could withdraw $40,000 the first year. This rule is based on historical market performance and assumes a balanced portfolio. However, it's a guideline, not a guarantee. Consider your retirement length, market conditions, and risk tolerance when planning withdrawals.

Start saving for retirement as early as possible, ideally in your 20s when you begin working. The power of compound interest means money invested at age 25 can grow significantly more than money invested at age 35, even if you save the same total amount. If you start at 25 and save $300/month at 7% return until age 65, you'll have about $720,000. Starting at 35 with the same contribution yields only $360,000. However, it's never too late to start - even beginning at 40 or 50 can make a meaningful difference with consistent contributions.

Financial advisors often recommend saving 10-15% of your gross income for retirement, though 20% or more is ideal if you can afford it. At minimum, contribute enough to get your full employer 401(k) match (typically 3-6% of salary) - it's free money. If you're starting late, you may need to save 20-30% or more to catch up. Use this calculator to determine the exact monthly contribution needed to reach your retirement goal based on your current age, savings, and expected returns.

Historical stock market returns average about 10% annually, but a more conservative estimate of 6-7% is recommended for retirement planning to account for inflation and market volatility. Your actual returns depend on your asset allocation: aggressive portfolios (mostly stocks) might aim for 7-8%, moderate portfolios (balanced stocks/bonds) around 5-6%, and conservative portfolios (mostly bonds) around 3-4%. As you approach retirement, you'll typically shift to more conservative investments, which lowers expected returns but reduces risk.

First, always contribute enough to get your full employer 401(k) match - it's an immediate 100% return. Then, prioritize high-interest debt (credit cards with 15%+ rates) over retirement savings. For moderate-interest debt (4-7%), split your focus between debt payoff and retirement. Low-interest debt (mortgages at 3-4%) can often wait while you maximize retirement contributions, especially if you're young and can benefit from decades of compound growth. The key is balancing debt reduction with the time value of money for retirement savings.

Inflation erodes purchasing power over time. If inflation averages 3% annually, something costing $1,000 today will cost about $1,800 in 20 years and $2,400 in 30 years. This is why you need to account for inflation in retirement planning. If you need $50,000/year today, you might need $90,000/year in 20 years to maintain the same lifestyle. This calculator helps you factor inflation into your planning. Invest in assets that historically outpace inflation (stocks, real estate) and consider inflation-protected securities like TIPS for part of your portfolio.

Use these accounts in this priority order: 1) 401(k) up to employer match (free money), 2) Max out Roth IRA if eligible ($6,500/year, or $7,500 if 50+), 3) Max out 401(k) ($22,500/year, or $30,000 if 50+), 4) Traditional IRA or taxable accounts. Traditional 401(k)/IRA contributions are tax-deductible now but taxed in retirement. Roth contributions are taxed now but withdrawals are tax-free. Choose traditional if you expect lower taxes in retirement, Roth if you expect higher taxes. Having both provides tax diversification and flexibility in retirement.

Yes, early retirement is possible but requires more aggressive saving and careful planning. The FIRE (Financial Independence Retire Early) movement aims for retirement in your 30s-50s by saving 50-70% of income. To retire at 55 instead of 65, you need more savings (longer retirement) and must bridge the gap until Social Security and Medicare eligibility at 62-65. Consider: you'll need 10+ more years of savings, healthcare costs before Medicare, potential early withdrawal penalties, and reduced Social Security benefits. Use this calculator to model different retirement ages and see the impact on required savings.

Don't panic - start now and maximize contributions. Even starting at 40 or 50, consistent saving can build meaningful retirement funds. At 40 with nothing saved, contributing $1,000/month at 7% return gives you $520,000 by 65. At 50, it's $260,000. Strategies to catch up: maximize 401(k) contributions (including catch-up contributions if 50+), delay retirement a few years, reduce expenses to save more now, plan to work part-time in early retirement, or relocate to a lower cost-of-living area in retirement. Every dollar saved today makes a difference.

Start with your current annual expenses and adjust for retirement. Typically decrease: work expenses (commuting, clothes, lunches), mortgage if paid off, retirement savings contributions, child-related expenses. Typically increase: healthcare costs, travel and hobbies, home maintenance. Many retirees spend 70-80% of pre-retirement income. Track your current spending, identify what will change, and add a buffer for unexpected expenses. Remember to factor in inflation and increasing healthcare costs as you age. Review and adjust annually.

Yes, but conservatively. Check your estimated benefits at ssa.gov/myaccount. You can claim as early as 62 (reduced benefits) or delay until 70 (increased benefits). Full retirement age is 66-67 depending on birth year. Claiming at 62 reduces benefits by 25-30%, while delaying until 70 increases them by 24-32%. For planning, assume you'll receive 70-80% of estimated benefits to be conservative (accounts for potential future program changes). Social Security should supplement your retirement savings, not be your sole income source. Diversify your retirement income streams.