Retirement Calculator

How to use this tool

1. Enter your current age and retirement target. Set your current age, when you plan to retire, and your expected life expectancy. These define the accumulation and withdrawal phases.
2. Enter your current savings and contributions. Add your existing retirement savings balance and how much you contribute each year. If applicable, enter the employer match as a percentage of your own contribution dollars; salary-based match formulas are modeled in the 401(k) Calculator.
3. Set return and inflation assumptions. Enter the expected annual return before and after retirement, and an inflation rate. Historical defaults (7% pre-retirement, 5% post-retirement, 2.5% inflation) are reasonable starting points.
4. Enter your retirement income needs. Specify how much annual income you need in retirement in today's dollars, and how much you expect from Social Security or pension.
5. Review the projection. See your projected nest egg, how many years it lasts, and a year-by-year breakdown through both phases. You can also solve for the lowest annual contribution that funds the modeled retirement years while holding your other assumptions fixed.

How retirement projections work

The calculator models two phases: accumulation (from your current age until retirement) and withdrawal (from retirement through life expectancy).

During accumulation, each year your balance grows by your contributions, employer match, and investment returns:

Balance = (Balance + Contribution + Match) × (1 + Return)

Contributions increase by your stated annual raise percentage each year, reflecting typical salary growth and contribution increases over a career.

During withdrawal, your desired income is adjusted for inflation each year. Your portfolio withdraws the gap between desired income and other sources (Social Security, pension), and the remaining balance continues to earn returns:

Balance = (Balance − Withdrawal) × (1 + Post-Retirement Return)

The surplus or shortfall uses this same start-of-year withdrawal timing and post-retirement return, rather than simply multiplying the annual income gap by retirement years. It discounts each planned withdrawal using the selected return, compares that value at retirement with the projected nest egg, then reports the difference in today’s dollars. Its sign therefore agrees with the year-by-year funding result.

What return rate should I assume?

The US stock market (S&P 500) has returned approximately 10% nominal / 7% real per year on average over the past century. A diversified retirement portfolio (stocks + bonds) typically assumes 6–8% pre-retirement and 4–6% post-retirement as the allocation shifts to more conservative assets. The calculator defaults to 7% pre-retirement and 5% post-retirement - adjust these to match your actual portfolio and risk tolerance.

Inflation and your retirement

Inflation erodes purchasing power over time. At 2.5% annual inflation, $60,000 today buys the same as $120,000 in 29 years. The calculator shows both nominal (future dollars) and real (today's dollars) balance figures so you can see what your nest egg is truly worth.

The 4% rule explained

The "4% rule" originated from a 1998 study showing that a retiree who withdraws 4% of their portfolio in year one, then adjusts for inflation annually, has a very high probability of not running out of money over a 30-year retirement. To find your target:

Target Nest Egg = max(Desired Income − Other Income, 0) × 25

For example, $60,000 in desired annual income with $20,000 from Social Security or a pension leaves a $40,000 gap for savings to cover, suggesting a $1,000,000 target. With no other income, a $60,000 gap suggests $1,500,000. This is a historical rule of thumb, not a guarantee; actual results depend on returns, fees, taxes, and retirement length.

Social Security integration

Social Security benefits significantly affect how much you need to save. You can estimate your benefit at ssa.gov/estimator. The three key claiming ages:

• Age 62: earliest eligibility; benefit is permanently reduced by 25–30% (for those with full retirement age of 67).
• Full retirement age (67 for those born 1960+): 100% of earned benefit.
• Age 70: benefit grows by 8% per year past full retirement age (delayed credits). Claiming at 70 maximizes lifetime benefit for those with long life expectancy.

Monte Carlo vs. deterministic projections

This tool uses deterministic projections: it applies a single assumed average return rate each year, ignoring year-to-year market volatility. Real portfolios experience return variability that can dramatically change outcomes. Monte Carlo simulation runs thousands of randomized scenarios using historical return distributions to calculate the probability of your portfolio lasting through retirement. For a rigorous analysis, consider using a Monte Carlo retirement planning tool alongside this calculator.

Healthcare costs in retirement

Healthcare costs can take a substantial share of retirement spending. Fidelity’s 2026 estimate says a single person retiring at age 65 in 2026 may need an average of $185,500 in after-tax savings for health care and medical expenses throughout retirement. It assumes Original Medicare Parts A and B plus Part D, and excludes long-term care, over-the-counter medications, and most dental services. Actual costs vary with health, location, coverage, and longevity.