What is a retirement calculator?
A Retirement Calculator estimates how much money you will need when you stop working and whether your current savings and contributions are on track. This page has four tools: one projects your target nest egg and any gap, one works out the monthly savings needed to reach a goal, one estimates a sustainable monthly withdrawal, and one shows how long a given balance will last. It is useful at any age, from a first job to the years just before retirement.
How to use it
- Start with the first box: enter your age, planned retirement age, life expectancy, income and current savings, adjust the assumptions, and click Calculate.
- If it shows a gap, use the second box to see the monthly or yearly savings needed to close it.
- Near retirement, use the third and fourth boxes to test withdrawals.
How much should you save for retirement?
There is no single number that suits everyone, but two rules of thumb are common: save 10% to 15% of pre-tax income while you work, and plan for retirement spending of about 70% to 80% of your pre-retirement income.
The 4% rule: formula and example
A quick way to estimate the nest egg you need is:
Nest egg = Annual spending from savings ÷ Withdrawal rate
If you expect to need $80,000 a year from your savings and use a 4% withdrawal rate, the target is $80,000 ÷ 0.04 = $2,000,000. Subtract expected income from Social Security or a pension first: if those cover $30,000, savings only need to supply $50,000, and the target falls to $1,250,000.
Inflation and retirement planning
Inflation lowers what each dollar buys, so a retirement that is 25 years away needs a larger figure than today’s prices suggest. At 3% inflation, $50,000 of today’s spending becomes about $105,000 in 25 years. The calculator includes an inflation rate so that its targets are in future dollars.
Common Sources of Retirement Income
Retirement income can come from several sources, including Social Security, 401(k) plans, IRAs, pensions, investments, CDs, and personal savings. Employer-sponsored retirement plans may also include matching contributions, which can increase the amount saved for retirement. Traditional and Roth IRAs provide different tax treatments, while pensions may provide fixed payments after retirement.
Investments and Personal Savings
Investments such as mutual funds, index funds, stocks, real estate, bonds, commodities, and CDs may also contribute to retirement wealth. Each option has different levels of risk and potential return. Personal savings can provide useful emergency funds and accessible cash, but long-term savings may need to account for inflation and the relatively low returns of some traditional deposit accounts.
Other retirement income sources
Rental property, annuities, part-time work, dividends and business income can all add to retirement income and reduce how much you need to draw from savings.
Tips
- Capture any employer match in your 401(k); it is part of your pay.
- Test a lower return and a longer life expectancy to see how robust your plan is.
- Review your plan every year or after a big life change.
- Check your projected Social Security benefit with the official estimator at ssa.gov.
Frequently Asked Questions
A common guideline is to save 10% to 15% of pre-tax income during your working years. However, your ideal savings target depends on your retirement age, expected expenses, income, and other sources of retirement income.
The 4% rule estimates the retirement nest egg by dividing expected annual retirement spending by 4%. For example, $80,000 of annual spending would suggest approximately $2 million in savings.
Yes. Inflation reduces purchasing power over time, meaning you may need more money in the future to maintain the same lifestyle. Retirement calculations can account for inflation when estimating future needs.
Common sources include Social Security, 401(k)s, IRAs, pensions, investments, CDs, and personal savings. Some retirees may also use rental income, annuities, dividends, or other passive income.
Some people do rely mainly on Social Security, but it is designed to replace only part of a worker’s pre-retirement earnings, so living on it alone usually means a much lower standard of living. Even modest savings started late, combined with working a few extra years or delaying Social Security, can make a meaningful difference.
Disclaimer: This calculator gives estimates for general information only. It is not financial, tax or legal advice. Results depend on the numbers you enter and on simplified assumptions, so your actual figures may differ. Check important decisions with a qualified professional or the official source.
Related Calculators
To plan each part of your retirement income, try these related calculators.