Retirement Calculator

How to use the calculator

1. Current and retirement age: in whole years.
2. Current savings and monthly contribution: everything earmarked for retirement, such as 401(k), IRA and taxable accounts, and what you add each month including any employer match.
3. Expected return and inflation: average annual rates you want to test.
4. Income needed: the yearly income you want in retirement, in today's dollars.
5. Other income: yearly income that doesn't come from savings, such as a pension or your own Social Security estimate from ssa.gov.
6. Advanced options: the withdrawal rate (4% by default) and a yearly raise in your contribution.

How the calculator works

The projection runs month by month. The annual return r becomes a monthly factor (1 + r)^(1/12), and each contribution is added at the end of the month, rising once a year by the increase you set. The final balance is shown in future dollars and in today's dollars:

today's dollars = balance ÷ (1 + inflation)^years

Your target is the nest egg that can fund the income your other sources don't cover:

needed = (income needed − other income) ÷ withdrawal rate

• Gap = needed − projected savings in today's dollars. A negative gap means you're ahead.
• Monthly contribution needed = the flat monthly amount, without yearly raises, that reaches the target grown by inflation.
• Income supported = projected savings × withdrawal rate + other income.

Returns are smooth, and taxes, fees and the order of good and bad market years are not modeled.

Worked examples

1. Age 35, $50,000 saved, $750 a month

At a 6% return for 32 years, the balance reaches $1,162,935.90, or $527,706.07 in today's dollars with 2.5% inflation. You want $60,000 a year and expect $24,000 from Social Security, so savings must cover $36,000: at a 4% withdrawal rate that's a $900,000 target. The gap is $372,293.93. Closing it takes $1,482.31 a month; as planned, your savings plus Social Security support $45,108.24 a year.

2. Same plan, contributions up 3% a year

Raising the $750 by 3% each year lifts the result to $688,741.98 in today's dollars and cuts the gap to $211,258.02.

3. How assumptions move the answer

A 50-year-old with $200,000 saved and $1,500 a month, same other inputs, would reach $696,761.39 in today's dollars by 67 and need $2,389.25 a month to hit $900,000.

The 4% rule and its limits

The default withdrawal rate comes from William Bengen's 1994 article in the Journal of Financial Planning. Using U.S. stock, intermediate-term Treasury and inflation data from 1926, he found that withdrawing 4% of the portfolio in the first year and raising that amount with inflation never exhausted a portfolio in less than 33 years. He assumed 50% to 75% in stocks and tax-deferred accounts. The Trinity study (AAII Journal, February 1998) tested 1926–1995 and found 3% to 4% inflation-adjusted withdrawals gave high success rates for stock-dominated portfolios, without adjusting for taxes or costs.

Both rest on past U.S. returns over about 30 years. A longer retirement, higher fees, a bond-heavy portfolio or weaker future returns can call for a lower rate. Treat the result as a planning range, not a promise.