Retirement Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
Projected savings of $1,378,632 at 67 fall $156,074 short and last until age 87 and 3 months; saving about $110.85 more a month would close the gap
| Age | Contributions | Withdrawals | Growth | Balance | In today's money |
|---|---|---|---|---|---|
| 36 | $9,000 | $0.00 | $3,245 | $62,245 | $60,727 |
| 37 | $9,180 | $0.00 | $3,984 | $75,409 | $71,776 |
| 38 | $9,364 | $0.00 | $4,779 | $89,552 | $83,158 |
| 39 | $9,551 | $0.00 | $5,633 | $104,736 | $94,886 |
| 40 | $9,742 | $0.00 | $6,549 | $121,027 | $106,971 |
| 41 | $9,937 | $0.00 | $7,532 | $138,496 | $119,425 |
| 42 | $10,135 | $0.00 | $8,586 | $157,217 | $132,261 |
| 43 | $10,338 | $0.00 | $9,714 | $177,270 | $145,493 |
| 44 | $10,545 | $0.00 | $10,923 | $198,738 | $159,135 |
| 45 | $10,756 | $0.00 | $12,217 | $221,710 | $173,200 |
Returns and inflation are assumptions held steady every year. Real markets rise and fall, so treat this as one scenario and try a few. Taxes are not modeled: the income goal is before tax.
How to use the retirement calculator
- Enter your current age, the age you plan to retire and the age to plan until. Planning past your life expectancy gives a safety margin.
- Add your current retirement savings, what you put in each month (including any employer match) and how much you expect to raise it each year.
- Enter the yearly income you want in retirement in today's money, and your other income, such as a Social Security estimate from the Social Security calculator or a pension.
- Set the return before and after retirement and an inflation rate. These are assumptions, so try a cautious and an optimistic set.
Retirement projection formula
Withdrawal in retirement year t = (Goal − Other income) × (1 + π)t
Savings needed = Σ Wj ÷ (1 + ir)j
Extra monthly saving = Shortfall ÷ Σ gk × (1 + i)N − k
S is your current savings, Ck the contribution in month k (raised once a year), N the months until retirement and i the monthly growth rate, (1 + R)1/12 − 1 for an assumed yearly return R. In retirement, the gap between the income you want and your other income is withdrawn at the start of each month. It grows with inflation π once a year, and t counts years from today, so your goal keeps its buying power. Wj is the withdrawal in month j, discounted at the retirement return ir. The savings needed is the lump sum that covers every withdrawal up to your planning age. The extra saving is the shortfall divided by the future value of saving 1 a month on the same rising schedule (gk).
Worked example
You are 35 with $50,000 saved, contribute $750 a month and raise it 2% a year. You want $60,000 a year from age 67 in today's money and expect $24,000 from Social Security, so savings must provide $36,000. The assumptions are 6% before retirement, 4% after and 2.5% inflation.
- Projected savings at 67: $1,378,632, or $625,583 in today's money.
- The first year of retirement needs $79,335 from savings, because 32 years of inflation raise the $36,000 gap. Funding that to age 90 takes $1,534,706 at 67.
- That leaves a shortfall of $156,074, and the money would run out at about age 87. Saving an extra $110.85 a month from now, raised 2% a year, would close it.
- Working two more years instead, to 69, raises the savings to $1,585,270 and turns the gap into a surplus of $92,687.
Savings needed for each $10,000 of yearly income
The lump sum needed at retirement to draw $10,000 a year in today's money, rising with 2.5% inflation, for the number of years shown. Multiply by your own gap in tens of thousands: a $30,000 gap needs three times the figure.
| Return in retirement | 20 years | 25 years | 30 years |
|---|---|---|---|
| 3% a year | $188,476 | $232,798 | $276,054 |
| 4% a year | $171,725 | $207,409 | $240,593 |
| 5% a year | $157,081 | $185,876 | $211,402 |
| 6% a year | $144,236 | $167,523 | $187,211 |
A widely quoted rule of thumb is to save 25 times the yearly income you need from savings (the "4% rule"). The table shows how much the answer depends on the return and the length of retirement: at 4% for 30 years, the multiple is 24.1, not 25.
Making the projection more useful
- Use returns after fees. A 1% fund fee turns a 6% market return into 5% for you. The mutual fund calculator shows what costs add up to.
- Taxes are not included. Withdrawals from a traditional 401(k) or IRA are taxed as income, so set the income goal before tax. Roth withdrawals in retirement are usually tax-free; compare accounts with the Roth IRA calculator.
- Plan beyond the average. Life expectancy is an average, and many people outlive it. Planning to 90 or 95 costs more today but protects against running out.
- Check your workplace plan. The 401(k) calculator projects a single plan with your employer match and the IRS contribution limits.
- Returns will not arrive smoothly. A fall in markets just before or after you retire hurts more than one later on. Keep a margin and review the plan every year.
Frequently asked questions
How much do I need to retire?
Enough to cover the gap between the income you want and your other income for the whole of retirement. Drawing $10,000 a year in today’s money for 30 years, rising with 2.5% inflation, takes about $240,593 at retirement if the savings earn an assumed 4% a year, or $187,211 at 6%.
Am I on track if I save $750 a month?
It depends on your age, savings and goal. A 35-year-old with $50,000 saved, adding $750 a month (raised 2% a year) at an assumed 6%, would have about $1,378,632 at 67. To draw $36,000 a year in today’s money until 90 on top of Social Security, that falls about $156,074 short; saving roughly $110.85 more a month would close the gap.
Why does the calculator use today's money?
Prices rise, so $60,000 in 30 years will buy much less than $60,000 today. You enter your goal in today’s money and the calculator raises it with your inflation rate each year. At 2.5% inflation, a $36,000 gap becomes about $79,335 in the first year of retirement 32 years from now.
What return should I assume?
No return is guaranteed, so use an assumption after fees and try several. Many people use a lower return in retirement, when money usually moves into safer investments. The difference matters: the same goal can need tens of thousands more if the return is one point lower.
Does the calculator include taxes or Social Security?
Social Security goes in “Other income” as a yearly amount in today’s money, assumed to rise with inflation. Taxes are not calculated, so set your income goal before tax and remember that withdrawals from traditional 401(k)s and IRAs are taxed as income.