moneycalc

Retirement Calculator

Plan how much you need to save for retirement and estimate your monthly retirement income.

Retirement Details

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Historical S&P 500: ~10% nominal, ~7% inflation-adjusted

Projected Balance at 65

$2,376,362
in 35 years
Total Contributions$470,000
Investment Growth$1,906,362
Balance at Retirement$2,376,362
Monthly Income (4% Rule)$7,921.21

The 4% rule suggests withdrawing 4% of your portfolio per year for a 30-year retirement. This gives you roughly $7,921.21/month.

How Retirement Planning Calculations Work

This calculator projects your savings growth using compound interest over your working years, then estimates the sustainable income you can draw during retirement. The nest egg at retirement is calculated by growing your current savings and monthly contributions at the expected return rate. The retirement income is estimated using the withdrawal rate, which determines what percentage of your portfolio you can safely spend each year.

The "4% rule" is a widely used guideline suggesting you can withdraw 4% of your retirement portfolio in the first year of retirement, then adjust for inflation each subsequent year, with a high probability of not running out of money over a 30-year retirement.

Frequently Asked Questions

How much do I need to retire?

A common rule of thumb is to save 25 times your desired annual retirement spending (the inverse of the 4% withdrawal rate). If you want $60,000/year in retirement, you need approximately $1.5 million. However, your actual number depends on factors like expected Social Security income, pension benefits, healthcare costs, desired lifestyle, and retirement location.

Is a 7% return rate realistic?

A 7% real return (after inflation) roughly matches the historical average for a diversified stock portfolio. The S&P 500 has returned about 10% nominally and 7% after inflation over the long term. A more conservative portfolio with bonds might return 4-6% after inflation. Use a lower rate if you prefer conservative estimates or have a shorter time horizon.

What if I plan to retire early?

Early retirement requires a larger nest egg since it needs to last longer. The 4% rule was designed for a 30-year retirement. If you retire at 45 and live to 90, you need 45 years of income. Consider using a lower withdrawal rate (3-3.5%) and building additional buffer. Also factor in that you cannot access 401(k) funds penalty-free until age 59.5, so you need taxable investments to bridge the gap.